Installments and interest: how LoanAdmin calculates them
This guide explains how interest is calculated depending on the loan type and frequency, how installments are numbered on receipts, and why a loan's balance may not match "installment × installments left".
First: is your rate monthly or per period?
This is where most questions about weekly and biweekly loans come from. In the menu (☰) › Settings › Loan configuration, under Interest calculation, you choose how the rate is interpreted:
- Monthly (the default): the rate is monthly and is split across the month's payments. A daily installment carries 1/30 of the rate, a weekly one 1/4, a biweekly one 1/2 and a monthly one the full rate. Example: 20% monthly on biweekly payments = 10% per biweekly period.
- Per period: the full rate is charged on each payment. Example: 20% on biweekly payments = 20% per biweekly period.
When you create a loan, a line under the rate reminds you which basis is in use. Changing this option only affects new loans: existing loans keep the basis they were calculated with.
Loan types
Fixed Interest
Interest is calculated on the initial amount and is the same on every installment. All installments are equal.
Example: 1,000 at 20% monthly, biweekly, 4 installments (Monthly basis):
- Interest per installment: 10% of 1,000 = 100.
- Total to pay: 1,000 + 4 × 100 = 1,400.
- Installment: 1,400 ÷ 4 = 350.
Amortized
Fixed installments with French amortization. Each installment's interest is calculated on the remaining balance, so each installment carries less interest and more principal than the one before.
The same example (1,000, 20% monthly, biweekly, 4 installments, Monthly basis) gives an installment of 315.47 and a total of 1,261.88. The first installment carries 100 of interest; the last one, 28.68.
Open-ended Note
It has no end date and no fixed number of installments. Each period charges interest on the outstanding balance, and anything paid above that interest reduces the principal. The loan stays active until the balance reaches zero.
Some older loans are of the Fixed Anticipated Interest type. On those, interest is charged first: the first installments cover the loan's interest and, once it's paid off, the following installments pay principal.
Round installment
In Loan configuration you can turn on Round installment. The installment is always rounded up to the unit you choose, and the loan total is recalculated with the rounded installment.
How each payment is split
When you receive a payment with the Installment Payment or Delayed Payments option, the period's interest is covered first and the rest is deducted from principal. With Interest only, the interest is paid and the principal doesn't change. With Other amount, if the amount is less than the period's interest, everything goes to principal and the app doesn't ask anything. If it equals or exceeds the interest, the app asks whether the payment includes the interest: if you answer yes, the interest is covered first and the rest goes to principal; if you answer no, everything goes to principal.
Installment numbering on receipts
The receipt shows the installment as "N of X", where X is the loan's number of installments. N only counts payments that cover an installment: Installment Payment, Delayed Payments, Total Due and Pay off loan.
Interest only, late fee and Other amount payments don't advance the number: the receipt repeats the number of the last covered installment and adds an asterisk (*). That's why, if a customer made partial payments, the receipt number can lag behind the schedule.
If you'd rather show just "N" without the total, you can change it in the receipt settings. See Receipt settings.
Why the balance doesn't match "installment × installments left"
- Current Balance is principal; it doesn't include future interest. In the loan detail, Current Balance shows the principal still owed. The remaining installments also include each period's interest, so their sum is higher. The dashboard's pending totals also add up principal.
- On Amortized loans, the table is a projection. Real interest is calculated on the real balance. If the customer pays more, less, or pays toward principal, the interest on the following installments changes compared to the initial table.
- With Other amount, principal goes down according to your answer. If the amount is less than the period's interest, all of it reduces principal. If it's equal or greater and you confirm it includes the interest, only what exceeds the interest reduces principal; if you say it doesn't include it, the whole amount reduces principal.
To close a loan, use Pay off loan when receiving the payment: it shows the total balance plus the period's interest.