Record a loan you already have

Use these steps for a loan you have already asked the insurance company for. That includes loans from before you started IBC Tool. You record the loan so you can track it. You do not rebuild every payment from the past.

Taking a loan is one of the four actions the Agenda tracks. The important switch is I’ve already taken this loan. With it on, you are saying that action is already done, so the Agenda does not ask you to request this loan again. Leave it off only when the loan is still a plan and you have not asked for the money yet.

Steps

1. Open Policies & Loans, select Actions, and then select Record Loan. The screen is Record Policy Loan.

2. In Loan Details, turn on I’ve already taken this loan. The section When to use I’ve already taken this loan explains when IBC Tool turns this on for you, and when you should change it.

3. Choose the Policy. If the screen asks you to choose Separate loan or Add advance, keep Separate loan for a loan you are recording for the first time. Then choose the Budget Category. The category is your label for what the money was for. The insurance company does not see it.

4. Enter the Loan Amount. This is the amount you borrowed, not the balance you owe today. It has to be at least the Amount Remaining. The form rejects a loan amount smaller than what you still owe.

   Unpaid interest can push the principal you owe now above the amount you originally borrowed. When that has happened, enter the principal you owe now as the Loan Amount.

5. Enter the Date Taken. This can be a date from before you had an IBC Tool account.

6. Optional: enter a Purpose. This is a note for you. It does not go to the insurance company.

7. In Amount Remaining, enter the principal you still owe. Leave it empty if you have not repaid anything yet. Empty means the full loan is still outstanding, not that the balance is unknown.

8. Set how you repay the loan. What you see depends on the category.

   • For most categories, choose a strategy under Return of Capital Strategy. This is your plan for paying the loan back. It does not send a payment. Repay on a schedule with a PUA redirect shows I’ve already adjusted my PUA for this loan. Turn it on only if you have already lowered your paid-up additions payment at the insurance company.
   • For a recurring expense category, the section is Return of Capital — Recurring Expense. The category needs a funding rule before you can record the loan. If the screen shows I’ve already adjusted my PUA for this loan, turn it on only if you have already lowered your paid-up additions payment at the insurance company. See Fund a recurring expense.

9. If the screen shows I’ve already made this month’s payment, check it. IBC Tool turns it on when this month’s payment day has already passed. Turn it off if you have not paid yet, so you still get the reminder.

10. Select Record Loan.

What you see next

The Loan Recorded screen opens. It shows:

• Loan recorded, with a link to the loan.
• Opening allocation, if the loan is in a recurring expense category that holds less than the amount you still owe. IBC Tool records the missing amount on the day before the Date Taken, so the category covers that balance without you assigning it by hand. Select Undo if you do not want that allocation.
• PUA redirect, if IBC Tool recorded a change to your paid-up additions payment for this loan.

The Agenda does not show a reminder to request this loan.

A strategy that sends part of your paid-up additions payment to the loan adds an Agenda item to adjust that payment. The name uses your payment period, for example Adjust annual PUA payment. If you already made that change with the insurance company, turn on I’ve already adjusted my PUA for this loan before you select Record Loan. For Repay on a schedule, the switch shows under the PUA redirect amount. The loan switch and the PUA switch are separate. Taking the loan already does not mean the payment was already changed.

When to use I’ve already taken this loan

Turn it on after you have requested the loan from your insurance company. You do not need to wait until the money arrives. The Date Taken can be years before you started IBC Tool.

Leave it off when you are planning a loan you have not requested yet. The Agenda then shows Request a policy loan with the amount, so you remember to ask. After you have asked, select Mark done on that item.

IBC Tool tries to set the switch for you, and the guess can be wrong. Read it before you save.

It turns the switch on when the Date Taken is on or before your latest snapshot that has a loan balance. A balance of 0 still counts as a snapshot with a loan balance. The Date Taken starts as today, so a loan you are only planning can open with the switch already on. If you leave it that way, you will not get the reminder to request the loan.

After you change the switch yourself, IBC Tool leaves it alone. Check it once more before you select Record Loan.

A new loan or another advance

An insurance company usually keeps one loan balance for each policy. You can take more money against that same balance later. In IBC Tool, each amount you take is an advance. You can still track those amounts as separate loans, one per purpose.

When the policy already has an active loan that is not a recurring expense loan, the screen asks you to choose:

• Separate loan records a new loan with its own purpose and budget category. Use it for a new goal, for example a car next to a rental property you already borrowed for. The insurance company still has one balance. The two loans are how you keep the goals apart.
• Add advance adds money to a loan you already recorded. If the policy has more than one loan, choose which one under Add to which loan. Enter the Advance Amount and the Date, then select Add Advance. An advance never adds a reminder to the Agenda, so I’ve already taken this loan does not apply. Use Add advance only for money you have already requested. For money you still plan to request, record a separate loan and leave the switch off, so the Agenda reminds you to ask.

A recurring expense loan cannot take an advance. Record a separate loan for any more money.

When IBC Tool finds a loan

A snapshot can show a loan balance you have not recorded yet. IBC Tool then offers a link to record it. The link opens Record Policy Loan with I’ve already taken this loan turned on, and you cannot turn it off. The snapshot already shows the loan, so asking you to request it would be wrong.

What the link fills in depends on where you select it.

• No active loan recorded on the policy, for example Add detected loan on the policy setup card. The link puts the loan principal from your snapshot into both Loan Amount and Amount Remaining, and it puts the snapshot date into Date Taken. If you know the original loan, change those. Put the real date in Date Taken. Put the amount you borrowed in Loan Amount, as long as it is at least the principal from the snapshot. Leave that principal in Amount Remaining, because that is what you still owe.

  If the snapshot has Loan Balance only selected, as for the Lafayette Life portal, the link fills in the loan balance instead. That balance can include accrued interest. Lower Amount Remaining to the principal you owe, and set Loan Amount to what you borrowed. Loan Amount must be at least Amount Remaining.

• Record the missing loan on a snapshot result. The policy already has a loan, and the link fills in only the part of the balance that is not recorded yet. Choose Add advance to add that part to the loan you already have, unless the money was for a different goal. The link puts the snapshot date in Date. Change it to the date you took the advance, if you know it.