Loan Expense (Increase) not showing up in Loan Account

Question

I just made my first loan payment and the full payment was deducted from the loan balance.

The loan principal is being reduced by the full payment instead of just the payment against principal. The loan balance should decrease by the principal amount, 81.87 not the full payment amount of 831.04.

The Payment is being split correctly.

Perhaps the loan account is not updating correctly as the interest expense is not showing up.

Tom Young · Answer

"The Payment is being split correctly."

IF the payment recorded in the Checking Account is being split correctly AND the loan is setup as a manual loan THEN the loan balance should be going down by the principal element of the payment.

"Perhaps the loan account is not updating correctly as the interest expense is not showing up."

That at least suggests that you have set up the loan Account as a downloading loan, and if that's the case then the lender should be sending only the principal amount of the payment to the loan Account.  The lender does not send any additional information - interest and escrow elements - so that information needs to come from someplace else.

Please make clear if the loan is manual or downloading.

Assuming that you used the Quicken loan "wizard" in either case and created Reminders for the payments that post to the checking Account, then the correct split up of each payment should be posting there.

A screen shot(s) of what you're experiencing would be helpful.

Tom Harney · Answer

Thank you.

I was hoping for more automation, and I will look to see what the mortgage company is offering online.

UKR · Answer

You cannot expect a downloaded loan payment transaction in your checking account to contain information about principal, interest and escrow withholdings. That information is not available from the bank.

I suspect your loan or mortgage accounts was connected to the mortgage company for transaction downloading.

I would just simply set up loan accounts as "offline" (manual) loan accounts with a Scheduled Reminder to record the monthly payment from your checking account.

(Not discussing LOC or HELOC accounts here. They should be set up as offline credit card accounts)

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 name seems to vary with the Loan Type you selected when creating the loan account in Quicken.

Effective with Quicken Windows 2018 and newer

you should be able to deactivate an online-connected loan account and regain full control over your transaction register.  And  you should also 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.

If you're a Q Mac user, you should be able to do something similar about setting up and maintaining an offline mortgage account together with a correctly calculated Scheduled Transaction Reminder for the monthly payments from your checking account.