NetLoan - Calculate Interest (Dynamic Installment)

Overview

Dynamic Installment loans build their amortization schedule one period at a time, so calculating interest is a recurring step you perform each period rather than a one-time setup task. This article explains how to calculate interest for a single loan or for many loans at once. It applies only to loans whose loan type uses the Dynamic Installment schedule type.

Prerequisites

• The loan's loan type must have Loan schedule type set to Dynamic Installment.
• The loan must be in Commenced status.
• The loan's initial balance journal entry must already be posted.
• Any transactions tagged to the loan for the period should be synced before calculating interest.

Step-by-Step

Calculate Interest is one step in the period-close sequence: post the initial balance, sync the period's tagged transactions, calculate interest, then run the amortization journal entry. Running these steps out of order can produce incorrect balances and interest.

Individual Loan

1. Open the loan record.
2. Confirm the initial balance has posted and the period's transactions are synced. View full size
3. Click Calculate Interest in the toolbar. View full size
4. Confirm the Period to calculate. The current open accounting period is selected by default; you can choose a different period, or specify a Start Date and End Date instead. For a loan originated mid-period, the origination period is available even though its schedule line starts mid-month. View full size
5. Click Calculate Interest to process.

NetLoan generates a period-end schedule line showing the period's interest and updates the loan balance and accumulated accrued interest. View full size

Mass Calculate Interest

1. Navigate to NetLoan > Mass Update Loans > Calculate Interest. The page displays a Filters section, with the current open accounting period selected by default.
2. Configure the filters to identify the loans to process: Subsidiary, Lender or Borrower, Period (or a Start Date and End Date), Loan Type, Loan, and Flagged for Mass Update (check to show only loans flagged for mass updates).
3. Review the loans in the Loans sublist. Check the box next to each loan to process, or use Mark All / Unmark All to select or clear all displayed loans.
4. Click Calculate Interest to process the selected loans. View full size

NetLoan generates a period-end schedule line on each selected loan and updates its balance and accumulated accrued interest. Loans in Pending or Fully Amortized status are automatically excluded from processing.

Considerations

• Re-running Calculate Interest: Interest for a period can only be recalculated if the amortization journal entry for that period hasn't posted yet. If a transaction is synced into a period where interest was already calculated but not yet posted, NetLoan removes the existing period-end schedule line and prompts you to re-run Calculate Interest. Once the amortization journal entry has posted, the period is closed and re-running Calculate Interest returns "Month End already posted."
• Processing order matters: Running period-close steps out of sequence can produce incorrect balances and interest.