Need way to account for interest v. principal in debt payments

When I make a payment on a debt, part of that payment goes to the principal, and part of it goes to interest. However, when YNAB tracks a long term debt, it does so without any ability to calculate the interest rate or APY. This means I have to manually reconcile the accounts after every payment, correcting the actual remaining balance. This is tedious, and could be easily fixed by including a debt calculator feature when setting up the tracking account. Inputs should include APY, loan term, and payment amount. Looking forward to this feature!

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    • Dan
    • Dan_YNAB
    • 3 yrs ago
    • Official Response
    • Reported - view

    Hey  Spring Green Piano , thanks for that great suggestion. We realize that handling loan (and investment) accounts haven't been exactly intuitive for most users.

    It's true, we have opted for simplicity in how those accounts are handled, but that leaves the inability to track interest and principal. 

    For example, if you wanted to track how much of your payments go to interest and principal, you'd have to have multiple categories for each of the elements of your mortgage payments, adjust them each month as the principal and interest change, maybe doing so retroactively, and manage massive split transactions. It would mean a lot of work and energy focusing on fine-tuning the mortgage payment instead of maybe reallocating those resources to fine-tuning how you plan to age your money for instance.

    Now, your suggestion for a loan calculator would obviously simplify some of the minutiae of adjusting interest, but that still leaves the additional categories and split transactions, and at the end of the day - simple is better.

    But I do want to let you know that I've passed along your request to the design team and they'll definitely be reviewing it. And before doing so, I wanted to give you a little context as to some of the reasons why we haven't moved in that direction just yet.

    Anyway, thanks again for caring enough about the app to want to improve it. It's fun to hear what our users are looking forward to, so keep 'em coming!

    Oh, by the way, since this isn't technically a bug, I hope you don't mind me moving the topic to our App Functions section.

  • Given that my bank doesn't split my payment into interest and principal, I just download their transactions into the tracking account, which confirms that the transfer of the loan payment and it also adds the interest charges as a single transaction.

    No math needed. 😀

    So the balance is correct once a month, and on a multi year loan, that is close enough.

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      • Dan
      • Dan_YNAB
      • 3 yrs ago
      • 1
      • Reported - view

      negrcian  I do something similar. 

      1. I have a scheduled transfer transaction for my outgoing loan payment on the first of the month. 

      2. Then, once a month, I will update the balance like this and the result is technically my interest. It shows up as a Reconciliation Balance Adjustment outflow. I don't really bother to rename it, since I only track the account to see it's effect on my Net Worth.

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  • Status Answered
  • 3 yrs agoLast active
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