Loan accounts
Loans and mortgages - lump debts you pay down over time, and why they behave differently from a credit card.
A Loan or Mortgage is installment debt: a fixed amount you borrowed once and pay down on a schedule. Car loans, student loans, personal loans, and your mortgage all live here.
How a loan differs from a card
You do not make purchases on a loan, so a loan has no stream of categorized spending to track. Its balance is a single liability, and the way it changes is by being paid down.
That is why loan transactions stay out of your per-category budget. Record the monthly payment as a transfer from the account you pay it out of to the loan: your cash drops, what you owe drops, and the payment itself is budgeted as an ordinary bill on the cash side.
What a loan tracks
- Amount owed - the balance today, which is what your net worth uses.
- APR - the interest rate, used for payoff estimates.
- Minimum payment and next due date - the due date surfaces on your Calendar.
- Original principal, start date, and term - what the loan looked like on day one.
- Monthly escrow - mortgages only, for the tax and insurance portion of the payment.
On a linked loan your bank supplies these and they are read-only. On a manual loan you enter them, and you update the balance yourself as payments post.
Payoff
When you enter an amount owed, an APR, and a minimum payment, Pocketwatch estimates how long the debt takes to clear at that payment. A loan is considered paid off once its balance reaches zero.
For a deeper look at what extra payments would do to a mortgage, the free mortgage payoff calculator compares scenarios side by side without touching your data.
Last updated July 25, 2026