how to enter loan payments to include principal and interest
This is for Quicken Deluxe for Windows. I have been entering loan payments starting from a checking account register. In that register I enter the total loan amount using the loan account as the category. the problem is that the loan account then applies the entire amount as principal to the loan, making the loan balance incorrect. I have looked at splitting it into two categories, but don't see any way to define the split in a way the loan account understands.
What is the right way to do this?
Comments
-
IF you have set up the loan in Quicken using the Quicken loan "wizard" then Quicken should have created an amortization schedule for that loan and "knows" the split between principal and interest for each payment. Did you use the loan wizard in your setup, or is this an Account (a liability Account) that you created by simply entering the opening balance of the loan?
Assuming for the moment that you didn't use the wizard, then in the checking Account, when you make a payment, you split the payment between principal and interest on the Split Transaction screen. ONLY the principal amount is transferred to the loan Account. The remainder of the payment, the interest, is coded as a Category (expense) such as Mortgage Loan Interest or the like.
When you use the loan wizard Quicken asks you how you want Quicken to handle the future payments, either as a simple Reminder that pops up or as an entry to the checking Account prior to when the payment is due:
-1