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Amortization schedule software calculates costs for financing a purchase by allocating a lump sum over time. It creates a table of payment values that change over time, with most payments going towards interest at the beginning and principal at the end. Depreciation planning software calculates the impact of financial options, including multiple loan types, compounding periods, and payment frequencies. It can be integrated into customer management systems and should include features like document merging and output options. This software is commonly used in financial institutions, loan bureaus, and credit management organizations to speed up loan processing times.
Amortization schedule software is a tool used to estimate the costs associated with financing a purchase. Depreciation is the process of allocating a lump sum over different time periods. There is a financial impact to this process due to the time value of money. This concept is found in both investments and financial loans.
An amortization schedule is a table that provides the payment value due for each term period. Although the payment amount is usually fixed, the amount applied to interest and principal changes over time. Each time a payment is made, the principal decreases. The amount of interest due is recalculated for the next period. At the beginning of the term, most of any payments are applied to interest, while the majority of the payment amount towards the end of the term goes towards reducing the principal.
The primary purpose of depreciation planning software is to quickly and accurately calculate the impact of various financial options. Most commonly used for loans, the software should include multiple loan types, compounding periods, and payment frequencies. Additional features might include balloon payments, late payments, and additional fees.
Depreciation planning software is typically incorporated into a customer management system, where customer account details are stored. The software is used to provide the outstanding principal balance at the end of each period, the payment allocation to principal and interest, and any additional fees or notes. The software allows you to create estimates for potential loans, using the calculator function to determine the monthly payment amount for auto loans, mortgages and any other type of loan.
Features that add value when purchasing amortization planning software include document merging. This allows scheduling data to automatically populate a written document, such as a loan agreement or bank statement. This time-saving feature also improves data quality, as information is obtained from a single source, with no modification for human data entry error.
Output and integration options are very important with depreciation planning software. Data must be able to be exported in most common formats, including Microsoft Excel®, text, or a comma-separated file. Format templates to control printing are an important factor in product usability.
This type of software is most commonly found in financial institutions, loan bureaus, and credit management organizations. The accuracy and speed of amortization scheduling software has had a huge impact on loan processing times, enabling companies to provide accurate and complete information very quickly.
