How do I close a loan or mortgage

If you have either paid off your loan or mortgage, or have refinanced or transferred to another lender and wish to zero out the loan, then entering the final payment outside of a 'loan payment' transaction may be difficult to work out.

In MS Money, there is a special category called 'Principal Transfer'. You don't always tend to see it in the category drop down lists when you create a withdrawal or debit transaction. However, you can type it in, and then enter a subcategory of the name of the loan (this is easier to do with two dropdowns for category and subcategory). The view of this in operation can be seen in the image below.

Principal Transfer category in Microsoft Money

If you're using two dropdown lists, then the available loan account names are visible in the second dropdown list. (If you're using Money 2005, you can turn on the dual dropdown lists by referring to Article 434).

Knowing this, if you need to transfer an amount into a loan to zero it out, you can use this category to transfer the correct amount of money from the account you are paying it from. Use a payment type transaction though, as you can't use categories in transfer transactions.

Category: Loans

Keywords: mortgage, loan, close