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How Do I Set Up a Simple Interest Loan in ZimpleMoney?

Follow these steps to set up your Simple Interest loan correctly using the Add-on Principal & Interest loan type for accurate tracking.

To set up a Simple Interest loan in ZimpleMoney, use the Add-on Principal & Interest loan type.

This option gives you fixed, equal principal and interest payments each month, regardless of how many days fall between actual payments, making it the right fit for accurately tracking simple interest terms.

Important: You'll calculate your Add-on Principal and Add-on Interest figures before entering them, so double-check your math using the formula below to ensure your loan tracks correctly from day one.

How to calculate the Add-on figures:

  1. Calculate total interest: Loan Amount × Annual Interest Rate × Loan Term (in years)
  2. Calculate total repayment: Loan Amount + Total Interest
  3. Divide by the number of months in the term to get your fixed monthly Add-on Principal Payment and Add-on Interest Payment

Example: Setting Up a Simple Interest Loan

Here's a worked example using a $100,000 loan at 12% annual interest over 60 months (5 years).

Calculating the Add-on Figures

  • Total interest: $100,000 × 12% × 5 years = $60,000
  • Total repayment: $100,000 + $60,000 = $160,000
  • Monthly Add-on Principal Payment: $100,000 ÷ 60 = $1,666.67
  • Monthly Add-on Interest Payment: $60,000 ÷ 60 = $1,000.00
  • Total monthly payment: $1,666.67 + $1,000.00 = $2,666.67

Step 1: Enter the Loan Terms

  1. Start a New Contract.
  2. On the Loan Terms step, enter:
    • Loan Amount: $100,000.00
    • Interest Rate: 12%
    • Loan Term: 60 months
    • Calculate Interest From: your chosen start date
    • Payment Start Date: your chosen first payment date
  3. For Type of Loan, select Add-on Principal & Interest.
  4. Enter your calculated payment fields:
    • Add-on Principal Payment: $1,666.67
    • Add-on Interest Payment: $1,000.00

Step 2: Set Up Late Fees and Return Fees
Enter your fee terms on the same Loan Terms step, using whatever grace period, late fee, and return fee amounts apply to your agreement.

Step 3: Add Any One-Time or Recurring Fees
If applicable, add a One-Time Fee (such as a setup fee) or Recurring Fee on the same step. One-Time Fees can be set to either Add to Payment or Include in Payment, depending on whether you want it added on top of the first due amount or deducted from it.

Step 4: Complete Contract Setup
Finish entering participants and review your service plan and Terms of Use to activate the contract.

Adjusting the First Payment to Reflect a Down Payment

If your simple interest loan includes a down payment collected as the first payment, you'll manually update the first payment amount after the contract is created.

Step 1: Update the Recurring Payment Amount in Loan Terms Summary

  1. Open the loan and go to the Loan Terms Summary box.
  2. Click the payment amount shown in green next to "Payments."
  3. Update the fields:
    • Add-on Principal Payment: your down payment amount minus the Add-on Interest Payment
    • Add-on Interest Payment: your standard Add-on Interest Payment (unchanged)
    • Apply Changes: One-time
  4. Confirm the update.

Step 2: Update the Next Payment Amount in Payment Summary

  1. After the Loan Terms Summary updates, go to the Payment Summary box.
  2. Click the payment amount shown in green next to "Next Payment."
  3. Update the fields:
    • Current Due Date: your intended first payment date
    • Apply Changes: One-time
  4. Confirm the update.

Applying both changes as One-time ensures the adjustment only affects the first payment cycle — all subsequent payments will revert to your originally configured recurring Add-on Principal and Interest amounts.