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2016-05-03 - First Payment Month

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For amortizing loans with level payments, lenders now can set first payment month to control when the first payment occurs. 

 

The first payment month can be set in the Interest Options popup.

 

Once the first payment is scheduled, all subsequent payments will be scheduled according to the payment frequency.

Example: For an amortizing loan with annual payment frequency and first payment at month 6, the second payment will be scheduled for the 18th month.

As you can see below, since this loan is set with 60 month maturity and Amortization, with the first payment 6 months, the balance is actually $0, 6 months before maturity.  To prevent this from happening, Amortization should always be equal to or greater than Maturity + First Payment Month.

 

If in this example, the first payment month is moved back to the 18th month, it shifts the amortization, but the monthly payment amount does not change. When payments are delayed with the first payment month, there will be a balloon payment at maturity.

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