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Excel/Excel and Loan Payments


QUESTION: I have an interest only loan on a HELOC. I would like to pay it down periodically but I am not sure how much principal I can pay periodically.

I would like to have an excel model that will determine the interest amount on the principal and then readjust each time I pay down the principal.

For example, the total debt is $20,000 payable over 7 years with a balloon payment due at the end for the remaining principal. For the first payment, the interest-only portion of the debt is $100 and I pay $200. Therefore the debt is now $19,900. For the second payment, the interest-only portion is $90 and I pay $150 or $60 in principal...and so on. I want to figure out what the interest only portion each time after the principal is adjusted.



ANSWER: Fairly straightforward I think

I'd put the following headings in place
Amount Paid

In the first row, the capital is the initial capital ($20,000).  The interest is a formula

=capital * interestrate

(replace my words with cell references, or values)
The amount paid is typed ($200)

In the second and subsequent rows, capital becomes a formula

=PreviousCapital + PreviousInterest - PreviousAmountPaid

The interest formula is carried down from the first row, and assuming you want to keep the payments constant, the payment is a formula


Fill this down as much as you need and you will have a working model.  You can overwrite any payment formulas with values if you want to alter them at any time.

---------- FOLLOW-UP ----------

QUESTION: Is there a way to project what the interest payment will be based on the new principal amount? For example, if the principal is $20,000 and the first payment requires an interest due on the first payment is $100 and the payment is $200, the new principal for the second period is $19,900. What would be the second payment provided the interest rate is 4% annually and it is compounded daily?



it is doable - my financial skills may not be up to the task though!  different people seem to use different methods to get the interest rates - this page explains how to get a daily rate - as it's a daily rate, you can get the number of days by subtracting the previous payment date from the current one.  Excel does come with a lot of financial functions, though I've never used them!
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Aidan Heritage


I have provided first hand support since `95 for Microsoft Office majoring in Word and Excel - support for all versions from 2 onwards. I'm based in the UK, so please allow for time differences when asking me questions from other parts of the world!


My background is in the insurance industry and call centre areas, but have been called upon to provide many varied solutions.

I'm educated to UK A level standard, but as I left school some 30 years ago that is rather irrelevent - university of life has provided more of a background!

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