Creating Loan Payments in QuickBooks 2019

Watch the QuickBooks 2018 video tutorial below. Learn about creating loan payments or how you’re going to put in the checks that you write for the loans.

Now that you know how to actually set up the loan in the Chart of Accounts, let’s talk about how you would make a payment towards those loans.

I want to go ahead and open up the register for the loan that we just created. I want you to see that there is one transaction in the register already and that is the transaction for the opening balance.

When we make a payment, we could come in here and actually type the payment in. But, there are two other scenarios that might work a little bit better.

One, if you’re just going to make the payment, you might want to consider using the Write Checks feature in QuickBooks. Because you’ll have a little more flexibility over entering additional information. Maybe you want to split some out between principle and some by interest.

The other thing you could have done was some people will enter them as a bill and then pay it later. That way, they always have it on their list. So, they know how much they owe each month.

Let’s start over with the Write Checks feature and we’ll put in our first payment.

The first thing you want to do is make sure you have the correct bank account (chosen from the dropdown list). And then, in the number field, you can put in anything you want to indicate the type of payment that this is.

I’m going to say the first payment is in January. Then, I’ll plug in the name of the bank that we’re making the payment to (which is Great Statewide Bank). We’ll say that the monthly payment is $500. Then, we have a memo field where we can type anything we want.

Now, down at the bottom, what you want to do is make sure that the principal amount goes back to that loan we set up. And the interest goes to an account called, Loan Interest. If you don’t know the principal and the interest breakdown, just go ahead and put it all to the actual loan itself (to the principal). Later, you can come and break it down but if you do know it’s nice to put it in now.

Let’s say that $200 went to the principal, and we’ll say that $300 went to the interest. Let’s go ahead and Save & Close. Then we’ll go look at our Chart of Accounts and see what it looks like.

Back in the Chart of Accounts. I’m going to open up our register again for the loan. Now, you’ll see the check that we wrote right there.

You’ll notice it says, “Split”. Because this transaction was split amongst two different accounts (principal and interest). And notice only $200 of our $500 is in this particular register because that’s all that went to the loan. The rest of it actually went over to the interest.

That’s a quick overview of how you’re going to put in the checks that you write for these loans. What I’d like to do now is take you over into the Loan Manager. This is really where you’re going to be able to set up all the information about the loans. And have it spit out the correct amount for the principal and interest for you.

Cindy McGuckin

Cindy McGuckin is an IT trainer with over 20 years of experience. Cindy currently manages the IT Training Department at Trident Technical College, she's a Member of the Association of IT Professionals, Charleston, SC chapter and the Treasurer of the South Carolina Association of Continuing Higher Education. Cindy is a Microsoft Office and QuickBooks expert and her online courses have received hundreds of 5-star reviews. Her no-nonsense approach to teaching complicated topics makes her classes engaging and interesting.