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Loan Amortization

Use this workbook to create amortization schedules for loans requiring up to 720 payments.

Entering Data

In most cases, all of the information needed to produce the amortization schedule and related debt disclosures is entered on the Input screen.
The upper section of the worksheet requests the following information needed to prepare report headers and debt disclosures:  
  • Client's name
  • Lender's name
  • Loan purpose or other information that identifies the borrowing
  • Description of any collateral
  • Name of the firm or person preparing the schedule
  • Balance sheet date
The financial statement disclosures are not prepared if the client name and lender name are not entered, and a summary of debt maturities is not generated if a balance sheet date is not entered. Also, if a description of the collateral is omitted, the financial statement disclosures describe the loan as unsecured.
The disclosures presented are those that are common to most loan agreements.  Additional disclosures may be required if the loan agreement contains restrictive covenants, an unreasonable stated interest rate, or unusual payment terms. For a complete listing of required disclosures related to notes payable, long-term debt, and other obligations, refer to the GAAP disclosure checklist found in PPC's Guide to Preparing Nonprofit Financial Statements, PPC's Guide to Nonprofit GAAP,and other PPC Guides.
In the lower section of the Input screen, enter the date of the first payment, select the payment frequency, and enter any three of the following variables:
  • Amount borrowed
  • Annual interest rate
  • Payment amount
  • Loan term (in years)
The variable not entered is calculated automatically after three of the variables have been entered.

Entering Unusual Payment Terms

Some loans call for balloon payments on specified dates. Also, some borrowers make additional principal payments from time to time. To modify the amortization schedule to reflect such irregular payments, click the Amortization Schedule tab and enter the additional payment in the appropriate cell in the Additional Principal Payment column.
To produce an amortization schedule showing a change in interest rate or loan refinancing, prepare two amortization schedules: one using the original loan terms and another using the revised terms and remaining loan period. For example, if the interest rate of a five-year loan requiring monthly payments is reduced from 10% to 8% after two years, (a) prepare an amortization schedule based on a five-year loan at 10% with a balloon payment due at the end of two years and (b) use the balloon payment amount as the amount borrowed to prepare another amortization schedule, with 8% as the interest rate, and the remaining loan term (3 years) as the payback period.  Use the Loan Summary template to prepare a financial statement disclosure when the entity has several loans payable.