Extra Principle Payments

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From: Simon St John


Hi again,

If you want to see the effect of extra principle payments, how can you enter this in PIA?

Cheers

Simon
 
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From: Webmaster (Somersoft)


This depends on which loan you are trying to assess the effect.

(1) Investment Loan: If you are looking at making additional ad hoc principal repayments off an investment loan, this is possible through the "Annual Investment/Outlays Payments" dialog. You make this pop-up by clicking anywhere on the Projections part of the Outlays row of the Investment Analysis spreadsheet or by clicking on the "After Purchase" button in the bottom left-hand corner of the "Outlays" dialog. Such payments are assumed to be made at the end of the year shown and will appear in the Outlays row of the spreadsheet.

(2) Home Loan: More typically, you would be looking to see the impact of making additional principal repayments of your home loan (or any non-deductible loan). To do this, you need to choose the Home Loan Analysis spreadsheet (View Menu) and specify the addition regular monthly payment in the appropriate cell of the input column (if it is a regular additional payment), or in the cell under the appropriate year in the "Irregular" payments row if it is an ad hoc annual payment. An even more powerful repayment schedule is to specify a credit line and have the program work out how much spare cash you have available to repay. Naturally, you need to have done your living expense budget, etc for this to be useful.
 
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