Loans, daily interest accrual, balances
I've got ten different student loans set up in my YNAB account, linked across two different servicers, and my balances were off by a significant amount when I looked them up today ($150 for one of the servicers, about $110 for the other.) I've determined, at least for the first servicer (Great Lakes) that this is because they add interest accrual to each loan's balance every day. The connection doesn't seem to account for these balance adjustments; if I look at the bubble number in the sidebar it's reflective of the balance as of my last payment, not as of today.
Example: I made a payment on some of my loans yesterday. Great Lakes today reports the balance on my lowest account as one penny higher than YNAB reports it, because the account has accrued a penny in interest in the last 24 hours. This adjustment hasn't imported presumably because it isn't a line item on the balance sheet.
Of further note, when I first connected the accounts, the numbers it imported as starting balance were the balance *as of that day*, interest included. That makes sense, but because the payments on each loan are split between interest and balance (outflow and inflow respectively) the balances were off when I went to reconcile today. I fixed this by adjusting the starting balance for each account to be the $ amount as of the date of my last payment prior to linking and adding an interest line-items, but I was hoping I wouldn't have to add eight interest line-items each time my autopay goes through just to make sure that the balances are correct.
Is there a way for the connection to properly report a balance on an account like this? I've got an auto loan set up too and it's reporting interest correctly.
Don't have any student loans so I'm just making a guess about your situation.
I don't track either my mortgages or stock investments in YNAB. I track those on a separate net worth spread sheet. The stocks mainly because the balance changes every day. For my mortgages, the balance doesn't change that quickly so updating monthly works for me. In YNAB, all I track is what I pay monthly for them. For me, the bottom line is, what do I put toward these monthly? What do I want to find in my monthly budgeting to put toward them? Then, track that the balances are going the way I want them to, monthly, on a separate spread sheet. If I kept them in YNAB, they would drown out all the useful information YNAB provides me.
Violet Mare said:
I'm actually on track to have one of the loans fully paid off in the next couple of months.
That is the bottom line, what is most important to you.
In my budget, believe I would add a category group called "debt reduction" and decide on what I can put toward this goal monthly. Then break it down to how much goes to which lender. Then celebrate when I'm able to reach my goal.
It looks like you have already decided how you are going to reach your goals, and are making progress. Congratulations! That is fantastic!
Regarding updating with the corrected balance daily, it sounds too complicated and time consuming, for me. If it works for you, that is all that counts.
I don't have my student loan accounts linked, but I do track the principal & interest manually. I can definitely relate to the tedium of manually adjust each separate account every month!
I used to have a tracking account for each loan's principal, & one for total interest, that I had a split transaction for my regular monthly payment on. I then manually adjusted the balance on each once a month. I got tired of manually adjusting so many accounts, so I recently switched to having just one tracking account for the principal & one for the interest. I can see that the one I am paying more on is going down when I log in to my student loan portal, & the balance in YNAB goes down the same either way.
I wish I had a solution, or even an explanation for you!
So, good luck to you with your payback. I also have Great Lakes as a servicer and have spoken with them several times over the years, each time learning a new application of their terms and conditions. Fun times. This is how I deal with it in YNAB and Excel combo.
YNAB: loans are combined into one tracking account. Each month, an automatic transaction moves money from my checking to loan. Each month, I verify the amount of interest that has been paid and make an outflow on the tracking account to the tune of "interest to get balance on payment date 3/22/19." That way, each month reflects a month's growth and repayment. I do not track changes daily.
In Excel, I created a sheet with a row for each loan serviced by them with columns for account numbers, balances on payment/due dates, interest accrued each month, percentage of principal allocated to each loan, any extra payments, and new monthly balances that start the calculations over again. From that math, I can project how they will allocate my regular payment to each loan (my margin if error is within 3 cents, not bad, since they won't tell me their rounding rules). I have also mapped out my avalanche to pay it off.
Word to the wise:
If you use automatic withdrawals (good way to reduce interest...), Great Lakes automatically changes your due date to be the date of your auto draft. This affects the implementation of a few choice rules.
#1 All extra payments must first take care of any accrued interest.
#2 Any payment made after the previous due date must act as the normal monthly payment for the next month, meaning it's allocated among the loans without your control.
This means that to maximize your extra paydown power, you should only make extra payments at the same time you make normal payments: there is no interest, and you get to allocate all the extra to either the highest interest loan or lowest balance loan, depending on whether you're using an avalanche or snowball.
Move Light Sound Life That's how I handle my student loans. I just set it up as a tracking account and I go in and manually reconcile the difference once my payment has posted to the account.
That way I can see that big red number going down each month.
The other, more granular tracking I think would be easier in an Excel sheet.