Why is interest on a loan payment deducted from the balance of the loan?

emikej
emikej Member ✭✭
This is the first payment on a new mortgage account I set up. I split the principal & interest in categories, but the balance reflects the full amount of payment.

Best Answer

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    Answer ✓
    In the split payment, what categories are used for:
    1. Transfer of principal to the loan (to reduce loan amount)
    2. Expense of interest
    3. Any other amounts in the payment (such as escrow)

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

Answers

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    Answer ✓
    In the split payment, what categories are used for:
    1. Transfer of principal to the loan (to reduce loan amount)
    2. Expense of interest
    3. Any other amounts in the payment (such as escrow)

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

  • emikej
    emikej Member ✭✭
    Thanks. I split the payment and only transferred the principal. All is well.
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