Loans are the conventional installment loans with an initial fixed loan amount to be paid back in regular payments over a fixed period of years at a specific interest rate. The parameters for Loans are:

Example: To calculate the monthly payments for a $25,500 loan at 7.25% annual interest compounded monthly for a period of 25 years ...

1.  Click on the (Loans) tab in the top row of tabs in the FinancesOSX window.

2.  Click on the (Payment) tab in the second row of tabs.

3.  Enter "25500" in the {Amount Borrowed} field, "12" in the {Payments per Year} field, "7.25" in the {Annual Interest Rate} field, and "25" in the {Number of Years} field. Tabbing is permitted between fields.

4. Click on the [Compute Payment] button. The monthly payment of "$184.32" for the specified loan is then displayed in the {Compute Payment} field. This answer can be copied to the clipboard.

An error message is displayed for Interest Rate and Loan Period calculations if the inputs result in the loan never reaching a zero balance (e.g., the payment is less than the initial interest payment).

If points are charged for the loan, the number of points can be entered in the # Points field and the Effective Interest Rate will be displayed with the calculations. See "Points" below.

Amortization Schedule: Whether to calculate the amortization table or not can be set using the {FinancesOSX:Preferences ...} menu item to enter either "Y" or "y" to always calculate the table, or "N" (actually, any other characters) to always bypass the table calculations. Use the [Default] button in the Preferences panel to reset these parameters to the default value of "Y." Click [Save] after changing any preference value.

Clicking on the [Amortization Schedule] button on the Loan screens will display the loan amortization (repayment) window. The amortization window can be dismissed with the normal red close button.The amortization table is populated/repopulated with the repayment data when any of the Loan [Compute ...] buttons is clicked, whether the amortization window is displayed or not.

The calculation and display of the amortization table in its window can take a minute or so for extremely large numbers of total payments (payments/yr x # years). The maximum total payments is more than 650,000. The display process of the table continues after the calculation result is displayed, and takes the majority of the time needed to regain program control.

The loan amortization table consists of a heading row with the key loan information, followed by rows for each loan payment showing the interest and principal amounts, the new loan balance, and the cumulative totals for the principal, interest and payment amounts.

Summary rows display the accumulated interest and principal payments for a repeating group of payments. The starting payment and number of payments in each summary group are set in the {FinancesOSX Preferences ...} panel. The default is every 12 payments, starting with payment #1.

The summaries can be useful for estimating the annual interest paid for tax purposes. In that case set the starting payment to correspond with the initial January payment # and the "Summarize every _ payments" value to 12. Use the [Save] button to apply your changes to these two parameters. Use the [Default] button in the Preferences panel to reset these parameters to the default values of of 12 payments and payment #1.

The amortization table is generated by deducting the interest amount for each period from the payment and then deducting the result from the the loan balance. This is repeated until the loan balance is less than the required payment. if the final loan balance at this point is not zero, a final payment is made for the remaining balance plus the interest on the final loan balance.

The amortization table may not agree exactly with that of a lending institution due to differences in the calculation assumptions, such as rounding, the number of days in each period, the number of days in each year and whether the loan payment is made at the beginning or end of a period. The loan amortization table calculates the interest and deducts the payment at the end of each period, and does not round to the nearest cent.

The amortization table is resizable and can be positioned anywhere on your screen. The last size and location will be remembered when FinancesOSX is relaunched. The font and text size can be changed using the Font menu. The table will look best using a fixed width font, such as Monaco. The table can also be edited.

The loan amortization table columns are separated by tabs, and the table can be easily copied and pasted into another application, such as a word processor or spreadsheet. It can also be printed directly from FinancesOSX.

Points: Points are often charged by lenders as part of the up front costs to obtain a loan, and are usually expressed as percentages of the stated loan amount. Points are prepaid interest, and reduce the amount of money the borrower actually receives while the repayment schedule continues to be based on the original loan amount. This increases the effective interest rate for the loan. For example, a 30 year $200,000 loan at 6.00% annual interest has a monthly payment of $1,199.10. If three points are charged for the loan, the borrower returns $6,000.00 to the lender at closing (3% of $200,000), and thus actually receives a net $194,000 in loan funds. Since the repayment schedule is based on the original $200,000 loan amount, but only $194,000 is received, the effect is a higher actual interest rate on the money received. In this case, the effective interest rate is 6.29% on the $194,000 loan rather than the 6.00% as stated for a $200,000 loan.

Each loan screen has an entry field for the number of points charged for the loan, and an Effective Interest Rate result field. If no points are entered the Effective Interest Rate will equal the stated interest rate. If a value is entered in the # Points field, the effective interest rate will be displayed when the [Calculate ...] button is pressed. The effective Interest Rate is useful for comparing loan options with different interest rates and # points. It is quite usual for lenders to offer apparently lower interest rate loans with more points charged. The Effective Interest Rate can put these different options on a common interest rate basis.

Points do not change the amortization schedule for a loan. Repayment is based on the original stated loan amount, which is why the Effective Interest Rate is higher than the stated rate.

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