How Do I Choose the Best Loan Amortization Software?

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  • Written By: Alex Newth
  • Edited By: Angela B.
  • Last Modified Date: 06 November 2018
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Loan amortization software can help you organize loan-paying efforts by showing you how much you need to pay to ensure you pay off the loan on time. While most loans have a monthly repayment frequency, some may set up for weekly, daily or yearly payment, and loan amortization software should be able to adapt to different payment schedules. There are different loan types, such as fixed-rate and interest-only, and the best software should be able to work with different types to ensure the current loan amount is correct in the program. Late payments can occur for various reasons, and the software should be able to reflect late penalties. Software that can optimize your payment efforts also may be useful, because this can help you pay the debt faster.

Many loans have a monthly repayment schedule, but some loans have different payment schedules. To ensure that the loan amortization software displays the proper payment dates, it may be wise to get a program that includes all the different repayment schedules, especially your specific loan repayment schedule. This program also may show incorrect loan balances if the wrong repayment schedule is selected, making easy set-up a good feature to have.


There are several types of interest rates that can be applied to a loan, and this affects how much you have to pay back. The three most common are fixed-rate, variable-rate and interest-only. This greatly affects the balance of the loan, so loan amortization software should be able to adapt to the exact type of interest rate your loan is carrying.

Late payments can occur for a variety of reasons and most loans will have a penalty for this. The penalty may be a higher interest rate, a surcharge or a demand from the lender that the rest of the loan be paid off at once. It usually is helpful to have a feature that can reflect these penalties, based on the lender's response. For example, if the interest rate increases, then the loan amortization software should be able to reflect the higher interest rate.

A good number of loans allow you to pay the loan amount early to avoid excess interest rate charges, and getting loan amortization software that helps optimize your loan-paying efforts can be beneficial. Some programs will create plans to help you avoid extra interest and to pay off loans several months or years ahead of schedule, while others allow you to make your own plan and the software will reflect the changes. While this optimization feature is not required, it may save you money and time.



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