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Intuit

Set up a loan in QuickBooks Online

Learn how to record a loan in QuickBooks Online.

Did you recently get a loan? In QuickBooks Online, you can set up a liability account to record the loan and its payments. This account tracks what you owe.

Here's how to set up your liability account to track the loan. We'll also show you one way to put that loan money into your bank account.

Step 1: Set up a liability account to record what you owe

First, set up a liability account to record the loan:

  1. Select Settings ⚙ and then Chart of Accounts.
  2. Select New to create a new account.
  3. From the Account Type ▼ dropdown, select Long Term Liabilities. Note: If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
  4. From the Detail Type ▼ dropdown, select Notes Payable.
  5. Give the account a relevant name, like "Loan for a car" or "Covid-19 relief loan."
  6. In the When do you want to start tracking your finances ▼ dropdown, choose when you want to start tracking the transactions:
    • Select Today to start tracking transactions as of today. In the Account Balance field, enter the balance of the account for today. Enter
    • Select Other to pick a specific date to start tracking transactions. In the Select a date field, choose the date you want to start tracking transactions for the account in QuickBooks. In the Account Balance field, enter the balance of the account for the date you pick.
  7. Enter the full loan amount as a negative amount. This sets up the liability account with the full loan amount.
  8. Select Save and close.

Step 2: Record the money you got from the loan

Now you have an account with the full loan amount. Each time you want to make a payment towards the loan, you can record it against this account.

Follow the steps based on how you plan to handle the actual loan money:

Follow these steps if you put all the loan money right into the bank:

  1. Select + New.
  2. Select Journal entry.
  3. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
  4. On the second line, select your bank account from the Account dropdown. Enter the same loan amount in the Debits column.
  5. When you're done, select Save and close.
Important: If you put the money into an account that's connected to online banking, QuickBooks also downloads the transaction after you send the money to your bank. Match the downloaded transaction to this journal entry when you review your downloaded transactions.

This puts the entire loan amount into your bank account. Whenever you record expenses or purchases, you can select your bank account as the payment account.

Step 3: Record a loan repayment

When you're ready to pay back the loan, follow these steps to record each repayment.

  1. Select + New.
  2. Select Check. Or if you're in Business view, follow the steps to switch to Accountant view first. Then come back to these steps.
  3. Add a check number if you plan to send an actual check. If you use direct withdrawal or an ETF, enter Debit or ETF in the Check # field.

Then enter the following in the Category Details section of the check:

  1. On the first line, select the liability account for the loan from the Category dropdown. Then enter the payment amount.
  2. On the second line, select the expense account for the interest from the Category dropdown. Then enter the interest amount.
  3. On additional lines, add any additional fees. Select the appropriate accounts from the Category dropdown.
  4. When you're done, select Save and close.


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