Hi

I have opened a loan account in KMM using the New Account Setup Wizard. From time to time I will pay additional amounts of money into the loan in order to reduce the outstanding Capital amount.

Is it possible for KMM to take these additional investments into account when calculating future amortization transactions on this account?

In case you have setup the scheduled payments which calculate the principal and interest based on the current balance of the account then this will happen.

I used this for all my loans

Thank you for the quick response ipwizard.

Reverse engineering a mock up account showed that the scheduled payments will indeed vary the split between amortisation and interest according to the outstanding capital balance.

My request, however, originated from my inability to calculate a new loan term or monthly payment (interest + amortization) over the balance of the loan term. The Edit Loan Wizard still indicates the loan amount as the original loan and all successive calculations to calculate loan term, monthly repayments, balloon payment etc. are based on said amount.

I am actually looking for a refinance command without creating a new account.

knapie wrote:My request, however, originated from my inability to calculate a new loan term or monthly payment (interest + amortization) over the balance of the loan term. The Edit Loan Wizard still indicates the loan amount as the original loan and all successive calculations to calculate loan term, monthly repayments, balloon payment etc. are based on said amount.

I am actually looking for a refinance command without creating a new account.

I see the problem now. Well, the only thing I could think of is creating a new account and deleting it again to get the figures (or simply not saving it). Then edit your existing account accordingly (modify interest rate, payments, etc.) and adjust the balance with a simple transfer. I've done that in the past.

Would be cool if you could sketch up a use case and what you expect from the application to support you, so that we can implement some supporting feature in the future.

ipwizard wrote:
Would be cool if you could sketch up a use case and what you expect from the application to support you, so that we can implement some supporting feature in the future.

OK. Here we go:

A user engages into a loan agreement whereby he agrees to pay off a loan of ZAR 100'000, over 12 months, with an interest rate of 12%, compounded monthly. The resulting monthly repayment is ZAR 8'884.88.

After the 3rd month, the user decided to make an additional payment of ZAR 25'000.00 towards the repayment of the loan. The outstanding capital balance for the loan is now ZAR 51'108.02.

The user can now decide to
1. keep on paying monthly installments of R 8'884.88 and finish paying the loan earlier, or
2. he can still pay off the loan over the remaining 9 months but at a lower monthly installment.

It would be nice if KMM could calculate and set up scheduled payments for the above scenarios.

To do this in practice, I would ignore the history of the loan and treat it as a new loan going forward, but still in the same account (Refinance in the same account.)

Take the currently outstanding capital balance and use this to calculate remaining loan period/installment.

Hence the suggestion:

One of the steps in the "Edit Loan Account Wizard" asks the user for a date from which the changes will be effective.


Would it be possible to use this date to retrieve a new loan amount (Outstanding capital balance on said date) for use in further calculations?

The loan term must then be changed to number of remaining installments after the effective date.

The wizard should now be able to calculate and implement scheduled transactions on the new capital balance.

Hope this makes sense.

Certainly that makes sense. Apparently, we thought about such a feature sometime in the past (must have been way before the 1.0 release - and now that I looked it up: it was in the 0.6 release) due to the following comment I found in the source:

Code: Select all

        // we need to calculate the balance at the time of the change
        // in order to accurately recalculate the term. A special
        // situation arises, when we keep track of all payments and
        // the full loan is not yet paid out. In this case, we take the
        // the loan amount minus all amortization payments as the current
        // balance.
        // FIXME: This needs some more thoughts. We leave it out for
        //        now and always calculate with the full loan amount.


It looks as if this comment was added in the first appearance of the code in 2003. See http://kmymoney2.cvs.sourceforge.net/viewvc/kmymoney2/kmymoney2/kmymoney2/dialogs/keditloanwizard.cpp?annotate=1.1 and look for line 334. Now you all know why I love version control systems