Personal Loan Setup Query


E

Ernie

Hi:
I am trying to setup a Personal Loan (and have tried through Long Term
Loan). I can create the loan and it shows `Personal Loan -$5000) for example
but I cannot see where or how I get the money transferred to a bank account.

The loan was setup and then the funds paid into my existing savings account.

When I setup the account it asks me if it is associated with an asset
account, but that's not the same thing as I didn't use the whole amount on
one asset.

What muct I do so that I end up with:

Deposit to Savings Account: $5000
New Loan Opening Balance: $-5000

Thanks
 
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S

Scott Tyler

Ernie said:
Hi:
I am trying to setup a Personal Loan (and have tried through Long Term
Loan). I can create the loan and it shows `Personal Loan -$5000) for example
but I cannot see where or how I get the money transferred to a bank account.

The loan was setup and then the funds paid into my existing savings account.

When I setup the account it asks me if it is associated with an asset
account, but that's not the same thing as I didn't use the whole amount on
one asset.

What must I do so that I end up with:

Deposit to Savings Account: $5000
New Loan Opening Balance: $-5000

Thanks
http://umpmfaq.info/faqdb.php?q=193

As the loan automagically starts with a ($5000) balance, many ppl just
put a $5K deposit in their bank account, and leave it at that. You
could either do it with no category, or make a category up.

To do what you really want to do, you have to jump through a lot of
hoops. Back up your Money file, and consider creating a "Test" file to
play around with.

You need to set up the loan with a $0 balance and $0 payments, but with
the correct number and frequency of payments (I'm assuming this will be
monthly), and the correct due date for the first payment.

Next, go to the loan account register, and enter a negative transfer
($5000) from the loan account to the bank account. This transfer must
occur within a month of the first payment. Example: If the first
payment is due March 1st, the transfer must be dated February 1st or
later. If this causes an issue with your bank account balance (you got
the money in December, and already started spending it), you'll need to
run the transfer through another account (I have a "Deferred Payments"
account to handle situations like this.), such as $5000 from "Deferred
Payments" to "Savings" on the day the loan went through, and $5000 from
"Loan" to "Deferred Payments" within a month of the first payment. It
will eventually cancel out to zero.

Next, check your account balances, to make sure you ended up with $5000
in the bank account instead of ($5000), and that the "Deferred" register
(if applicable) nets out to zero. Go back to the loan register and/or
"Deferred" register and fix it if necessary.

Now, if the bank and loan balances are correct, go through the "Change
Loan Terms" dialog in "Account Settings", and put in the actual payment
amount. You may have to change the system clock at this point, as loans
in Money have an implicit start date of one month before the first
payment is due. DO NOT change the system clock if your antivirus is
about to expire, if you're running time-bombed trial software, etc. Put
a reminder in Outlook and change the terms later. As Money and your
bank probably won't calculate interest the same way, it's best to leave
the interest rate blank, and let Money calculate it. Otherwise, the
principal/interest split may not add up, or you may end up with
more/less payments than the actual term of the loan.

The last time I took out a loan was in early 2004, so it's been a long
time since I've had to do all of this for real. Hopefully it works out
for you.
 
E

Ernie

Hi!

Thanks Scotty. I thought maybe I was missing something fundamental as I
thought most loans (well here in Australia anyway) work that way, they lend
you money and disburse it to your bank account.

I will probably do the first option, setup the loan like normal and then
just put a deposit of $5000 into the account etc.

I just thought I was missing something basic to do!!

Thanks again
Ernie
 
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D

Dick Watson

From an accounting point of view all loans work this way. Money should
support some mechanism for the funds to make or from taking a loan transfer
into or out of the loan account. Sadly, it doesn't.
 

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