How to do an Interest Only loan
Posted: Wed Jan 11, 2023 2:10 pm
The only different in the set up is that the regular payment is the Interest Only payment amount instead of the amortized payment amount. Literally everything else is the same.
When collecting the payments, you might choose to mark the payments as "Interest Only" instead of "Regular Payment" if you see a couple pennies paying down the principal. But if the borrower pays more than the interest that accrued, a Regular Payment will automatically pay down principal with whatever extra is being paid by the borrower.
When collecting the payments, you might choose to mark the payments as "Interest Only" instead of "Regular Payment" if you see a couple pennies paying down the principal. But if the borrower pays more than the interest that accrued, a Regular Payment will automatically pay down principal with whatever extra is being paid by the borrower.