# Loans

The main difference between note and loan is that in a note only the borrower signs the note while in a loan the lender and the borrower have to sign the document. The loan documents are usually more detailed and have more frequent payments. An example of a loan is a mortgage. In a mortgage, payments are made each month till the loan is paid off. This is unlike the single payment note where payment is made at the end of the term or installment payment note where payments could be made annually, quarterly or as desired by the lender.

Like the installment note, the loan payments have to be amortized. Below is an amortization table for Uncle Joe \$10,000 loan paid monthly at 8% over 5 years.

Interest is computed as follows for the 1st period 10,000 * .08 * 1/12. 12 equal payments are made each year.

 Period Principal Bal at beginning of period Cash payment  (Same every payment) Interest expense (Principal * Rate) Principal Repayment (Cash payment minus interest payment) Principal Balance at end of period 1 \$ 10,000.00 \$202.76 \$             66.67 \$136.10 \$   9,863.90 2 \$   9,863.90 \$202.76 \$             65.76 \$137.00 \$   9,726.90 3 \$   9,726.90 \$202.76 \$             64.85 \$137.92 \$   9,588.98 4 \$   9,588.98 \$202.76 \$             63.93 \$138.84 \$   9,450.14 5 \$   9,450.14 \$202.76 \$             63.00 \$139.76 \$   9,310.38 6 \$   9,310.38 \$202.76 \$             62.07 \$140.69 \$   9,169.69 7 \$   9,169.69 \$202.76 \$             61.13 \$141.63 \$   9,028.05 8 \$   9,028.05 \$202.76 \$             60.19 \$142.58 \$   8,885.48 9 \$   8,885.48 \$202.76 \$             59.24 \$143.53 \$   8,741.95 10 \$   8,741.95 \$202.76 \$             58.28 \$144.48 \$   8,597.46 11 \$   8,597.46 \$202.76 \$             57.32 \$145.45 \$   8,452.02 12 \$   8,452.02 \$202.76 \$             56.35 \$146.42 \$   8,305.60 13 \$   8,305.60 \$202.76 \$             55.37 \$147.39 \$   8,158.21 14 \$   8,158.21 \$202.76 \$             54.39 \$148.38 \$   8,009.83 15 \$   8,009.83 \$202.76 \$             53.40 \$149.37 \$   7,860.46 16 \$   7,860.46 \$202.76 \$             52.40 \$150.36 \$   7,710.10 17 \$   7,710.10 \$202.76 \$             51.40 \$151.36 \$   7,558.74 18 \$   7,558.74 \$202.76 \$             50.39 \$152.37 \$   7,406.37 19 \$   7,406.37 \$202.76 \$             49.38 \$153.39 \$   7,252.98 20 \$   7,252.98 \$202.76 \$             48.35 \$154.41 \$   7,098.57 21 \$   7,098.57 \$202.76 \$             47.32 \$155.44 \$   6,943.13 22 \$   6,943.13 \$202.76 \$             46.29 \$156.48 \$   6,786.65 23 \$   6,786.65 \$202.76 \$             45.24 \$157.52 \$   6,629.13 24 \$   6,629.13 \$202.76 \$             44.19 \$158.57 \$   6,470.56 25 \$   6,470.56 \$202.76 \$             43.14 \$159.63 \$   6,310.94 26 \$   6,310.94 \$202.76 \$             42.07 \$160.69 \$   6,150.25 27 \$   6,150.25 \$202.76 \$             41.00 \$161.76 \$   5,988.48 28 \$   5,988.48 \$202.76 \$             39.92 \$162.84 \$   5,825.64 29 \$   5,825.64 \$202.76 \$             38.84 \$163.93 \$   5,661.72 30 \$   5,661.72 \$202.76 \$             37.74 \$165.02 \$   5,496.70 31 \$   5,496.70 \$202.76 \$             36.64 \$166.12 \$   5,330.58 32 \$   5,330.58 \$202.76 \$             35.54 \$167.23 \$   5,163.35 33 \$   5,163.35 \$202.76 \$             34.42 \$168.34 \$   4,995.01 34 \$   4,995.01 \$202.76 \$             33.30 \$169.46 \$   4,825.55 35 \$   4,825.55 \$202.76 \$             32.17 \$170.59 \$   4,654.95 36 \$   4,654.95 \$202.76 \$             31.03 \$171.73 \$   4,483.22 37 \$   4,483.22 \$202.76 \$             29.89 \$172.88 \$   4,310.35 38 \$   4,310.35 \$202.76 \$             28.74 \$174.03 \$   4,136.32 39 \$   4,136.32 \$202.76 \$             27.58 \$175.19 \$   3,961.13 40 \$   3,961.13 \$202.76 \$             26.41 \$176.36 \$   3,784.77 41 \$   3,784.77 \$202.76 \$             25.23 \$177.53 \$   3,607.24 42 \$   3,607.24 \$202.76 \$             24.05 \$178.72 \$   3,428.52 43 \$   3,428.52 \$202.76 \$             22.86 \$179.91 \$   3,248.62 44 \$   3,248.62 \$202.76 \$             21.66 \$181.11 \$   3,067.51 45 \$   3,067.51 \$202.76 \$             20.45 \$182.31 \$   2,885.20 46 \$   2,885.20 \$202.76 \$             19.23 \$183.53 \$   2,701.67 47 \$   2,701.67 \$202.76 \$             18.01 \$184.75 \$   2,516.91 48 \$   2,516.91 \$202.76 \$             16.78 \$185.98 \$   2,330.93 49 \$   2,330.93 \$202.76 \$             15.54 \$187.22 \$   2,143.71 50 \$   2,143.71 \$202.76 \$             14.29 \$188.47 \$   1,955.23 51 \$   1,955.23 \$202.76 \$             13.03 \$189.73 \$   1,765.50 52 \$   1,765.50 \$202.76 \$             11.77 \$190.99 \$   1,574.51 53 \$   1,574.51 \$202.76 \$             10.50 \$192.27 \$   1,382.24 54 \$   1,382.24 \$202.76 \$              9.21 \$193.55 \$   1,188.69 55 \$   1,188.69 \$202.76 \$              7.92 \$194.84 \$      993.85 56 \$      993.85 \$202.76 \$              6.63 \$196.14 \$      797.72 57 \$      797.72 \$202.76 \$              5.32 \$197.45 \$      600.27 58 \$      600.27 \$202.76 \$              4.00 \$198.76 \$      401.51 59 \$      401.51 \$202.76 \$              2.68 \$200.09 \$      201.42 60 \$      201.42 \$202.76 \$              1.34 \$201.42 \$         0.00

Principal balance at the end of the year is the beginning principal balance less any principal repayment