220 Quicken 2008: The Missing Manual
Editing a Loan
5. If you’re paying towards something other than principal, choose it in the
Most of the time, extra payments pay off principal (a smart thing to do because
it reduces the length of your loan and the total interest you pay). Quicken auto-
matically sets the Category text box to the liability account for the loan, which
transfers the payment amount into the account, thus reducing the outstanding
balance. But you can change the category to Escrow, for example, if the extra
payment is to satisfy your lender’s minimum escrow balance.
6. In the Amount text box, type the payment amount.
If you’re making an extra payment to reduce your principal, you get to choose
the payment amount. If your lender is asking for more money to make up for a
shortfall in escrow, type that amount.
7. In the Number drop-down menu, choose how you plan to pay, just like a regular
transaction in an account register (page 77).
Next Check Num, Print Check, Send Online Payment, and EFT are the likely
8. Click OK.
Quicken adds the transaction to the register of the account from which you paid.
If you’re paying off principal, the payment acts as a transfer to reduce the balance
in the loan liability account.
Editing a Loan
Loan characteristics change from time to time. For example, if you have an adjustable-
rate mortgage, the interest rate changes every so often. And each year, your escrow
payment increases as property taxes and homeowners’ insurance premiums go up.
Or maybe you need to correct a small error you made when you initially set up the
loan in Quicken. Regardless of the reason, the View Loans window provides the
tools you need to make all these changes.
For an extra payment, you have to
tell Quicken how much you want to
pay, and when you want to pay it.
The program automatically chooses
the liability account in the Category
box so that the payment pays off
loan principal. Change the category
to something more appropriate if
you’re making an extra payment to
satisfy the loan company’s escrow
minimum, for example.