> For the complete documentation index, see [llms.txt](https://tribalfs.gitbook.io/accountant/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://tribalfs.gitbook.io/accountant/planning/loans.md).

# Loans

Build a repayment schedule and split each payment into principal and interest.

**What you'll do:** set up a repayment plan for a loan or mortgage, so each payment is split correctly into principal (paying down the debt) and interest (an expense).

## Before you start

You need:

* an active **Liability** account in the **Mortgage loan** or **Other loans** category
* a **positive balance** on it: what you still owe, entered as the opening balance or recorded with a transaction
* an **Expense** account in the **Finance charges** category for the interest (you can create one during setup)

See [Setting up accounts](/accountant/accounts/setting-up-accounts.md).

## Set up loan payments

1. Open the loan account: **Accounts › Liabilities**, then tap the loan.
2. Tap **Set up loan payments**. *"Start with what you still owe, then enter the terms for your remaining payments."* The outstanding principal comes **From your posted account balance**.
3. Under **Loan terms**, enter:
   * **Annual interest rate (%)** from your lender. Use 0 for an interest-free loan.
   * **Interest calculation**: **Reducing balance** (interest on the remaining principal; most bank loans and mortgages) or **Flat / add-on interest** (interest on the starting principal, spread evenly).
4. Under **Repayment terms**, enter:
   * **Payment frequency**: **Monthly**, **Every two weeks** or **Weekly**.
   * **Remaining installments**: how many payments are left, including the next one.
   * **Next due date**.
5. Under **Payment accounts**, choose the **Interest expense account** (under Finance charges; tap **Create expense account** if you don't have one) and the account you usually **Pay from**.
6. Tap **Preview repayment schedule** and review the installments, interest and payoff date. Swipe sideways to see all the columns.
7. Tap **Apply schedule to account**.
8. **Tap Save on the account.** The plan isn't applied until you do: *"Loan plan ready. Tap Save in the toolbar to save the account and apply the plan."*

{% hint style="info" %}
The schedule is an estimate. It uses regular periods and a fixed annual rate, and doesn't calculate fees or daily interest. Check principal and interest against your lender's amounts when you record each payment. For flat-rate loans, you can enter the **Lender's remaining interest** if it differs from the estimate.
{% endhint %}

## Record a payment

Open the loan account and tap **Loan overview**.

<figure><img src="https://1159945679-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8bd5VZpQZgURnFb41Grh%2Fuploads%2Fgit-blob-81ff67c2bbf0464f1e3473a34b50e124d9372968%2Floan-overview.png?alt=media" alt="Loan overview" width="300"><figcaption><p>Loan overview</p></figcaption></figure>

* **Record payment** pays the next installment now, already split into principal and interest. Check it against your lender's figures and save.
* **Schedule payment** creates one scheduled payment for the due date. Review its amount and posting options before saving. **View full schedule** shows every installment with its status (**Paid**, **Overdue**, **Pending**). **Payment history** lists what you've paid. Turn on **Remind me before payments** to get a notification before each due date.

## Extra payments and changed terms

Tap **⋮ › More actions** in **Loan overview**. The **Manage loan** menu has:

* **Extra principal payment:** pay down extra principal. You can review the remaining schedule after saving the payment.
* **Adjust remaining payments:** recalculate after an extra payment or a change from your lender. Choose **Keep payment, finish sooner** or **Keep payoff date, reduce payments**. Previous payments stay in your history.
* **Disable payment management:** stop reminders and payment actions. Your schedule and payment history are kept.

If the balance or payment amounts change, Loan overview shows *"The balance or payment amounts have changed. Review the repayment plan."* and offers **Review repayment plan**.

Before you revise a plan, resolve any overdue, partially paid or pending payments, and link any payments listed under **Payments to review**. To link a payment you recorded yourself, use **Link to installment**.


---

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