New loan and mystery balloon payments
I could use some guidance on entering it correctly. Like most loans I assume the first payment happens a bit more than a month from the origination date.
When I view the payment schedule table I see several payments BEFORE the origination date. Really wrong. Not sure how that got in there. Wish I could see a simple register of editable transactions (like my checking account does!)
Help?!
Answers
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Sounds to me as if you have connected your loan account for online transaction downloading.
At least in Quicken for Windows, an online-connected loan or mortgage account does NOT have a transaction register. All data shown in the account come from whatever information the bank downloads to you ... if this process works at all.
As a result of being connected, the scheduled payment transaction reminder cannot transfer the amount of principal paid into the (non existent) account register and must use a category, usually something like Loan:Principal, instead. The category seems to vary with the Loan Type you selected when creating the loan account in Quicken.
Effective with Quicken Windows 2018 and newer
you can deactivate an online-connected loan account and regain full control over your transaction register. However, you should still review the Scheduled Reminder (or Memorized Payee List entry) associated with the monthly loan payments to ensure they now transfer Principal to the loan account register and not to a Category.0 -
Ok, I've deactivated the online connection for the loan (it's an auto loan).
I don't see the register. How do I access it?
Or do I need to delete the loan account and just start over?0 -
If you're just experimenting to set up a new loan account register in Quicken, it might be best to start over with a new "offline" (manual) loan account.
The transaction register for an offline account will be available in the account's Payment Details tab.
While setting up the account, be sure to set up and use the Scheduled Reminder for making your monthly payments from the checking account. It will have the principal and interest amounts calculated for each payment, +/- a few cents difference which you will have to correct every month, based on the loan statement.If you have a grace period before making the first payment, set up the loan as of the real first payment due date, not as of today's date or when you signed the contract.
If there are no hidden surprises on how the bank calculated the loan and you have defined it correctly, there should also be no balloon payment at the end. Use the monthly loan statement to adjust payment amounts as necessary.0 -
Thx.... now I see the register and I've simply deleted the added balloon payments. Much closer to being correct.
For the moment I've kept the origination date (Mar 27) and the first payment date (May 11) because that payment is (currently) in the future (already set up the payment)
If I take your advice and make the origination date the same as the first payment date, should I increase the original balance to add the accrued interest during the period actual orig date to first payment date?
Also.... The running balance on the loan doesn't reflect any interest being added (daily in my case). Doesn't seem right .0 -
If what you have now works, more or less, go with it.
Quicken can handle regular mortgages very well, because they follow a fixed set of rules. Car loans are a different situation, however. It all depends on what the bank does, how and when it records a payment transaction and how it calculates interest.
The important part is that your recorded payment transactions' principal and interest amounts match the bank's statements, to keep your records in sync with the bank every month0 -
Fortunately I'm not overly anal-retentive about such things.
That said, I don't see any indication that any interest is accounted for in my running balance.
What will the register look like once interest is accrued? I'm not expected to calculate and add the interest manually am I? (Sort of defeats the whole point of categorizing as a loan if it does....)
Thx!0 -
The loan account register only concerns itself with the monthly payments of Principal.
Interest is part of the monthly payment (see the Split detail in the scheduled reminder) and is paid directly to the bank. It does not visibly flow thru the loan account itself in the form of separate transactions.
You can find how much interest you already paid by looking at the category used to record the interest payment, usually something like Auto Loan:Interest.
The Payment Schedule in Quicken will show you how much principal and interest you will pay over the life of the loan.0 -
Sorry, I must not have made myself clear.
I was expecting the balance to be reduced by just a portion of what I paid in (ie, the principle portion of the first monthly payment).
It appears to have deducted the full payment from the balance to make the new balance. That's not accurate.0 -
If the loan is set up correctly, and if you are using the Scheduled Reminder created by the loan setup process to make payments from your checking account, then
- the total amount (principal plus interest) will be deducted from checking
- the amount of principal will be transfered to the loan account register to reduce the loan's balance
- the interest portion will be categorized to a Auto Loan:Interest category (or similar name)
Here's an example of how this would look like in the checking account transaction:
Line 1 is principal amount, line 2 is interest,
Line 3 is defined as "additional principal payments" and may be blank or 0.00 or, in my example, it was used to show the difference in Quicken-calculated amounts and actual amounts as shown by the loan statement. Have to account for that difference somehow, you know. (And in this example the interest amount is low because this was the last payment prior to the loan being paid off ... in case you're wondering)0 -
I decided easier to delete the "online" loan and just start over "manually". It's close enough now.
Then I made the mistake and clicked on my home mortgage and realized that the "online" nature of it has created numerous errors. I'll come back to that another day....0
