Overview

When setting up a loan, payments are initially calculated based on the assumption that payment dates occur at regular intervals.

In real life however, this is rarely the case: usually payments occur a few days before their due date, but it's also possible that payments are skipped or that extra payments are made, sometimes extra costs and penalty payments are due, etc.

Banks usually calculate interest at regular intervals, which may be monthly, quarterly or semiannually.

Tracking a loan

InterestThing lets you track your loan the way your bank does: by taking into account the actual dates and amounts of your payments and using the correct compounding dates.

For this to be as accurate as possible, it is necessary to use periods and days as date intervals. Using this method it is possible to set the real compounding frequency and the actual compounding dates.

First, add the loan amount as an Outflow event on the loan date. Then add some payments, unfortunately there is no easy way to do this: you'll need to enter an event for each payment you make.

Then figure out how your bank actually calculates interest, i.e. when is interest compounded.

For instance, if your bank statements are supplied quarterly, there's a good chance that setting the compounding frequency to quarterly and using January 1st as the reference date will produce the same results as in your bank statements.

If interest is compounded quarterly, you can add a repeating Balance date event that starts at the end of the quarter in which the loan date falls. Set the number of occurrences as necessary to have a balance date after the last payment.

When adding payments, make sure that you enter them as inflows: otherwise they'll be considered as extra loan amounts.

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