QuickBooks Loan Manager - An Overview

Published by John Smith at March 15, 2019

How is QuickBooks Loan Manager Helpful?

Let’s see how Loan Manager in QuickBooks works. Any loan needs a fixed monthly payment, and this includes the monthly compounded interest at a fixed rate, the monthly principal installments, the decreased interest portion and the increased principal portion that grows with each installment payment throughout the Loan.

Now, we know the Loan is issued at a fixed interest rate and with every installment reduces the principal amount of the outstanding loan, the interest paid of the fixed amount of installment payment is also lower.

The Loan Manager calculates the amortization schedule and keeps track of current due installment as well as the outstanding loan balance. Therefore, anyone using QuickBooks does not have to calculate the correct allocation of interest & the principal reduction in every monthly payment. Moreover, you do not have to track every payment to the amortization schedule.

Track loans in the QuickBooks Loan Manager - Preparation

Before utilizing QuickBooks Online Loan Manager, you can set up the below-given accounts & vendor in QuickBooks Desktop.

Make a vendor for Bank or Financial Institution that issued the loan. Perform this task if there is currently no existing vendor.
Next step is to record an Initial Loan amount as an opening balance (Using the New Account window) or as a transaction type of journal entry. Ensure to use a loan origination date.
If you see Payments have already been made against a loan, then you need to enter the checks, bills, or the Journal Entries.
Now set up an Expense type of account for the ‘Interest Payments’ and ‘Fees &Charges’, if none of it exists already
Make an ‘Escrow Account’ if required.

Also Read: How to solve QuickBooks Banking Error 102?

What is an Escrow Account?

Escrow is a particular portion of the loan that exists in a third-party account until the conditions are requirements of the loan are met. An Escrow Account is a QB Asset Account that tracks the Escrow Portion of a Loan Payment. The Escrow Accounts are usually used to pay Taxes and Insurance.

Set-up an Escrow Account:

Go to Lists Menu, and click ‘Chart of Accounts’
Click the ‘Account’ option and select ‘’
Select ‘Other A/c type,’ and select ‘Other Current Asset,’ and Press ‘Continue.’
Now type ‘Name of the Account’ in the Account Name section
Go to the ‘Description field,’ and fill in the brief note/explanation about the A/c.(this is Optional)
Now choose Save and Close.

Understand what is an Escrow Account and when QuickBooks loan Manager not Working by talking to a technical expert at QuickBooks help desk phone number 1.855.365.6O12.

Track Loans and Repayments using QuickBooks Loan Manager

Go to ‘Banking’ Menu, and press on ‘Loan ’
Now choose ‘Add ’
Fill in the Account Info of the Loan and press NEXT
1. The Account Name – Loan Account previously set up
2. The Lender- He is the Vendor to whom payments will be done
3. The Origination Date- The date from when the Loan starts
4. The Original Amount- This is the full initial amount of the Loan
5. The Term- The amount of time to repay the loan in full (this can be in Weeks, Months, or years)

Now, Enter the Payment Info of the loan& click NEXT
1. Choose the ‘Due date of the Next ’
2. The Payment Amount- The amount that will be paid for every period
3. The Next Payment Number- It is applicable if prior payments have been already done.
4. The Escrow Payment amount- This is the Escrow amount
5. The Escrow Payment account- This is the Escrow account
6. Click ‘Alert me in 10 days before the payment is due.’ (This is Optional)

Enter Interest Info of Loan and click ‘Finish’
1. The Interest rate- You can enter the Interest rate of Loan. For a 5% interest rate, fill in ‘5’ (no quotes), instead of ‘5%’ or ‘0.05’.
2. The Compounding Period- This is given on the Loan Documentation
3. The Payment Account- It is the Bank Account that you will utilize to pay off the Loan.
4. The Interest Expense Account- This is the Expense Account that can track the Interest.
5. The Fees /Charges of Expense Account- This is the Expense Account that will track fees/charges of the Loan.
6. Review Loan Info. For this choose ‘Edit Loan Details’ if required. The Loan details you have filled in reflect on the Summary Tab at the base of the Loan Manager.

What is ‘What If Scenarios Tool’

You can choose the ‘What if Scenarios Tool’ to see the effects of the repayment period, other payment amounts, etc.

Choose the ‘What if Scenarios’ option at the bottom of the QuickBooks Loan Manager Screen.
Now from ‘Choose a Scenario’ drop-down, choose either of the two options- ‘How much will I pay with a New loan? Or Judge/Evaluate two new loans.
Now from ‘select a loan’ drop-down, select a Loan to work with.
Next, you can fill in the ‘Loan Criteria’ and press ‘Calculate’ option to see results.
Choose the ‘print’ option to print out results.
Choose OK to shut it when you are done.

QuickBooks Loan Manager is an efficient tool to manage loan related tasks and activities and prevent any mistakes and blunders that might arise due to manual errors or because of other reasons. You can speak and consult with a technical expert if you have any doubt. Give a quick call at QuickBooks desktop support phone number 1.855.365.6O12.

Downloading bank transactions in QuickBooks Desktop