The effective date matters
A new rate should begin on the correct payment row or accrual date. Applying it one period too early or too late can change both the interest charged and the principal remaining.
Keep documentation of the prior rate, new rate, and effective date so the schedule can be reviewed later.
Payment amount versus payoff date
Some loans change the required payment when the rate changes. Others keep the payment amount constant and allow the payoff date or final payment to change.
The schedule should follow the actual loan terms and make the resulting balance and payoff information visible.
Why later rows must recalculate
A rate change affects more than one line. The interest portion of the current row changes, which alters the principal reduction and therefore changes the balance used by every later row.
Amortization Pro allows the rate on an individual payment row to be edited so the remaining schedule can be recalculated automatically.
Model the schedule in Amortization Pro
Use the free online calculator for a straightforward schedule, or use the registered Windows software when individual payment rows must be edited, saved, retrieved, and recalculated.