Last as Final
The last as final setting lets you decide whether the originally-calculated last payment on a loan should remain the last payment regardless of the payment history unless the loan is paid off early. This means that the final payment as originally calculated when a loan is set up will grow larger or smaller throughout the loan instead of extra periods being added to the loan in order to accommodate for extra interest that accrues when payments are made late, or payments that are missed altogether.
As an example, let’s say you create a loan for $10,000 at 12% annual interest with 12 total payments that come due each month. In this example, if you choose a days in year setting of “Frequency”, you should end up with 12 payments of $888.49.
This means that the originally calculated final payment is payment number 12. If you have chosen to use the last as final setting, the final payment will grow or shrink when needed if payments are missed or made late. So, in our example, if the first two payments are missed, the end of the schedule may adjust as shown below:
You can see that the final payment for this case has ballooned to $2,857.90. If you look at the same loan without last as final selected, the end of the payment schedule will look like this:
As you can see, in this circumstance, the loan term has extended to 15 payments.