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How do you track loan payments for loans with periods of deferment?

I have student loans that have gone in and out of deferment where the government paid interest during that time. These loans also changed interest rates several times.

How can I build out a history of loan payments in Quicken 2013? Everything seems to be automatic and from today forward.

What is the best way to handle complex loans like the ones I listed above and how do you account for interest paid for by the government? I considered either treating it as 0% interest during those periods or setting up an "External Source" account that interest is paid from.
  • I am going to follow this thread because I am trying to figure out how to set up a file for my Daughter and include her Student Loans, If I set up a loan, it wants interest rates and payment info, which we do not have yet.  How do I tell Quicken the loans are deferred till a later date.  All kind of questions about student loans.
  • As with any new experiment with your Quicken data, backup before and during the experiment or make a copy and practice on the copy first.

    A typical loan setup is from today forward, but there is nothing preventing setup of the loan with a date in the past. That is what I would do to backfill earlier payments.

    You might even set your computer's date back to the initial loan setup date, then increment the date forward to each change event in the loan life - like an interest rate change or deferment. At the initial setup, set the loan reminder for auto enter. Then as you step the computer date forward and restart Quicken, the loan payments will auto enter.

    That would allow you to capture the history.

    Currently in Q2013, a zero percent interest rate does not seem to be handled well. Not sure if this applies for a student loan or not - I am not familiar with the deferment process. Maybe one of you can describe it?
  • I already have a ton of history in place from Quicken 2012 when I was able to just make payments by going to the loan details and entering in a date and the payment info. I would frequently need to adjust the principal and interest to match what was actually taken out. I just don't see how I can do that in Quicken 2013 without setting up a new loan and incrementing through like you said.

    I hate the auto-enter stuff in Quicken 2013 because its rare that it matches 1-to-1 with what Sallie Mae calculates. For example, one of my loans I have setup to automatically take out an extra $100 every month and apply to principal. Well... when Sallie Mae does this they don't just add on principal, they completely recalculate the amortization schedule and obligation as reported to credit agencies!! (My credit score did not like that... so anyone else thinking of doing this, beware)

    Also for periods of deferment, here's how I understand it:

    Subsidized loans - You don't have to make any monthly payments and the government pays the interest.
    Unsubsidized loans -You don't have to make any monthly payments, but interest still accrues.

    Under both scenarios the length of the loan is extended because your principal payments are on pause during the deferment period. In the past I got around this by just extending the length of the loan a few years to get an approximate principal and interest due each month. While it was wasn't perfect, it worked in Quicken 2012. I am a bit stumped how to handle this in Quicken 2013.
  • I am also trying to figure out how to make student loans work on Quicken.  For the Unsubsidized loans, it is also important to recognize that the interest is not capitalized until your grace period ends.  One solution that I had considered was to figure out the daily interest for each unsubsidized loan I take out (principal * 0.068 / 365 days), multiply it by the number of days between opening and the end of the grace period, and add that amount as a balance adjustment at the end of the grace period.  It will then "capitalize" by being added to the principal, and Quicken can take it from there.  

    It's a real pain, so hopefully someone else can come up with a better solution.
  • Well Quicken won't calculate it properly no matter what you do because Stafford loans are simple interest loans and Quicken does not support them. Also, as someone else mentioned, student loan interest is calculated based on 365.25 days a year and there's no way to edit that in Quicken.

    After spending a bit of time I found this was the best way to handle multiple student loans with standard payment schedules:

    1) Create an intermediary account and make all loan payments from your checking account into this intermediary account. I do this because I have 3 loans that are all paid with a single payment from my checking account and Quicken doesn't handle that complex split very well when making payments to multiple loans at the same time.

    2) Set up your individual loans with basic info. Be sure to set them up as student loans so it creates the correct interest category. As far as I know you can't change the loan type or default interest category once the loan is created. Since quicken doesn't handle simple interest, I just leave the compounding period as monthly. Also I choose to set up the payments as a memorized payee instead of a bill reminder. I do have a bill reminder, but its a manual one I created to transfer the money for all 3 loans from my checking account to the intermediary account.

    3) Adjust for any interest rate changes. For subsidized loans in periods of deferment I drop the interest rate to zero. Technically the government is paying the interest during this time, but there's no point in tracking that. For unsubsidized loans in deferment I just leave the interest rate at whatever it should be if you were making payments. You put in your actual monthly payment info here instead of using Quicken's calculation, especially for whatever your current payments are.

    4) Enter in the payment history. I am pretty anal retentive so I chose to enter in all my historical loan payments. To do this I make the payments from my intermediary account. Just change the date in the register line to whatever historical payment you want to enter and hit CTRL+T to bring up the memorized payee list. Right click on the memorized payee for the loan payment you are entering and select "Use". Enter in your principal and interest for that particular payment... quicken's default calculation wont match, so just change it to whatever your payment was. After its in the register I like to edit the split transaction to remove the other categories that are auto-populated but have $0.00 associated with them.

    5) Account for any other disbursements or capitalized interest. I just enter these directly into the loan register as a transfer into itself. Note that quicken doesn't really like loans with multiple disbursements, so what I do is I make sure the loan is setup with an opening balance that is the sum of all disbursements. After that I just adjust the register accordingly to reflect the actual disbursements.

    6) After your historical payments are in, adjust the amortization as needed to account for any deferment or grace periods. Normally student loans are 10 years, but that's 10 years of being in repayment status, not from the date the loan was disbursed. To account for the deferment periods, I just add more time to the loan amortization. Check the NSLDS system for the exact dates your loans changed status: http://www.nslds.ed.gov/nslds_SA/. If you have the correct monthly payment amount per your lender already set, then just adjust the amortization just enough so you do not have a balloon payment.

    7) At this point your loans should be setup and the monthly payment breakdown for principal, interest, and extra principal will be pretty darn close to how your lender actually breaks it down. The interest payments listed in Quicken following the steps above should be less than a dollar different from your lender's calculation when viewing the full payment schedule.

    Note: Be careful when editing loan details, Quicken loves to recalculate your opening balance and add balance adjustments whenever you change anything in the loan details.

    Its not perfect but its the best way I have found to track student loans until they are officially supported in Quicken.

    Hope this helps.
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