When a loan is repaid in regular fixed payments, this repayment usually includes both compounded interest and principal installments for the period.
As each successive payment is made the interest portion gradually decreases and the principal portion increases. The QuickBooks Loan Manager creates an Amortization schedule for the duration of the loan, showing how much of each payment is applied to principal, interest and escrow (additional fees related to the loan). It also allows you to make payments for either the regular scheduled amount, or additional payments, and to run "what-if" scenarios to compare different loan choices.
Before setting up a loan in the loan manager you will need to set up one or more accounts in QuickBooks: one for the loan itself, one for interest expense and one for escrow if applicable. You will also need to make sure you have the lender set up as a vendor.
Click Edit loan details to change any of the information you entered when setting up the loan. The loan details you entered show on the Summary tab at the bottom of the Loan manager.
You can use the What if scenarios tool to view the effects of other payment amounts, repayment period etc.