Let’s see
how LoanManager in QuickBooks works. Any loan needs a fixed monthly payment,and this includes the monthly compounded interest at a fixed rate, the monthly
principal installments, the decreased interest portion and the increased
principal portion that grows with each installment payment throughout the Loan.
Now, we know the Loan is issued at a fixed interest rate andwith every installment reduces the principal amount of the outstanding loan,
the interest paid of the fixed amount of installment payment is also lower.
The
QuickBooks LoanManager calculates the amortization schedule and keeps track of currentdue installment as well as the outstanding loan balance. Therefore, anyone
using QuickBooks does not have to calculate the correct allocation of interest
& the principal reduction in every monthly payment. Moreover, you do not
have to track every payment to the amortization schedule.
