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How do I categorize a loan payment? Splitting Interest and principal?

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QuickBooks Team

How do I categorize a loan payment? Splitting Interest and principal?

Hello there, @phillimitone


Thanks for visiting the Community. To categorize and split a loan payment, you can click the transaction to expand the view if the payment is automatically downloaded in your bank feed. Here's how: 


  1. Navigate to the Banking tab, then go to the For Review section.
  2. Click on the loan payment, then select Split.
  3. Assign both of the categories according to their account type (Interest, principal).
  4. Once finished, click Save and add.


If this is a manual expense, the easiest way to split these transactions is to create a separate line item for each part of the transaction you'd like to see. Here's how:


  1. Click the +New, then select Expense.
  2. Enter a Vendor and transaction Date.
  3. On the first line, select the Loan's Liability Account. Enter only the principal amount of the payment under Amount.
  4. For the second line, you can choose an Interest Expense account and only enter the Amount of the Interest.
  5. Once finished, click Save and close


Here's an article for your future reference:  How to set and use banking rules for downloaded transactions. It will help you set up rules to speed up your review tasks. 


Let me know if you have additional questions. We're always delighted to help. 

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