How to Set Up a Loan in QuickBooks Easily 2026

Sign in to QuickBooks Online and open Chart of accounts, found under the left-hand Accounting menu, or under All apps > Accounting if you're on the newer navigation. This is where every account QuickBooks tracks lives: bank accounts, accounts receivable, and liabilities, each showing its current balance. A loan isn't created anywhere else in the interface; it starts here as a new liability account, so this list is your starting point regardless of how the loan will eventually be paid down.

Click New account and give it a specific name, such as "Office Equipment Loan" instead of something generic like "Loan", which matters once you're tracking more than one over time. QuickBooks pairs each loan account type with one specific detail type: choose Long Term Liabilities with the Notes Payable detail type if repayment runs past a year, or Other Current Liabilities with the Loan Payable detail type if the loan is due within twelve months. Notes Payable is the detail type Intuit's own help article names for a long-term loan; "Other Long Term Liabilities" is not the detail type currently documented for this.

The field for this is labeled Opening balance, not Unpaid balance. What you put in it depends on when you're doing this.

If the lender just deposited funds and you're recording the loan from scratch, leave Opening balance at $0 and record the deposit in the next step instead, since filling it in here as well would count the loan twice. If you're adding a loan that's already partway through repayment, enter the current balance as of today, not the original loan amount. QuickBooks posts any beginning balance to Opening Balance Equity to keep the books in balance, so using the original amount here overstates what you still owe.

A liability account by itself only tracks what you owe. It doesn't move any money on its own.

If the lender deposited funds into your bank account, record a bank deposit or journal entry that increases your bank balance and offsets it against the new liability account, so both sides of the transaction show up. If the loan paid for something directly, such as equipment bought through the lender, record that purchase against the liability account instead of a bank account.

A loan payment usually isn't one lump expense: part reduces the liability balance and part is a genuine interest cost. Record each payment (a check, in QuickBooks' own example) split across two lines, one against the loan liability account for the principal and one against an interest expense account for the interest. If the loan runs on a fixed schedule, setting this up as a recurring transaction under Recurring transactions saves you from re-splitting the amounts by hand every cycle.

Once payments start posting, check the Balance Sheet periodically to watch the liability balance decline, and run a Profit and Loss report to see the interest expense build up over time. Comparing the liability balance against your lender's own amortization schedule every few months is worth doing: a mismatch usually means a payment was split incorrectly between principal and interest, not an actual discrepancy with the lender.