Entering a loan with deferred interest Follow

When you enter a standard loan into your LivePlan forecast, the software will automatically begin applying interest the month after you receive the loan. If you're taking on a loan that won't accrue interest immediately (also known as "deferred interest"), here's how to represent that in your forecast.

Note: representing a deferred interest loan will require two separate financing entries: 

• One for the interest-free portion of the loan
• One for the portion of the loan with interest

In the example below, we'll enter a 36-month, $15,000 loan with interest deferred for the first six months. In the first six months, we'll make payments of $750.00 per month. After that, the loan will have 8% interest, and our payments will change accordingly.

Entering a deferred interest loan

Entry #1: Interest-deferred portion

1. In the Forecast page, click Financing: 
   
2. In the Financing section, click the Add Other button:
   
3. Give this segment of the loan a name:
   
4. Enter a zero for the interest rate on this segment, then click the button to indicate whether you will pay the loan back within 12 months or not. Click Next or Funding to continue:
   
   

   Note: a loan you'll pay back within 12 months is considered short-term debt in your financial statements. A loan you'll pay back in more than 12 months is considered long-term debt. For more details, see What is the difference between short-term and long-term debt?

5. The next overlay represents when you will receive the money. Enter the full value of the loan in the month you'll receive it. Click Next to continue:
   
6. The final overlay represents your payment schedule. Enter the interest-free payments you'll make in the months you make them. Then, in the month following the last interest-free payment, enter the loan balance to be paid. (This may seem strange, but we'll represent this balance again in the second loan entry.)
   
7. Click Create & Exit.

Entry #2: Portion with interest

1. In the Financing section, click the Add Loan button:
   
2. Give this segment of the loan a name:
3. Enter the interest rate on this segment, then click the button to indicate whether you will pay the loan back within 12 months or not. Click Next or Funding to continue:
4. Then, in Funding, enter the loan's remaining balance in the month that interest will begin accruing and click Next or Payments to continue:
5. Then enter your payment amounts for the remaining months of the loan:
6. Click Create & Exit.

The Financing table below shows no interest charges applied until after the first six months.

More on customized loans:

• Entering a loan with deferred payments
• Entering a pre-existing loan with customized payments
• Entering a loan with interest-only payments