Writing a check to a friend as a loan - setting up

Tony_Bago

I'm wring a check to a friend as a loan. What are the exact steps to do this properly. I've done the convert to a loan from the help section, but it always asks for an opening balance and won't accept $0.00. I would think the check should become the opening balance? Any guidance would be appreciated.

splasher

First off, DO NOT create the transaction in the checking account yet, it will be automatically generated by what follows.

After you go through the WHOLE process of setting up the account, go to the Payment Details of the loan account and change the category of the Opening Balance transaction from [lender loan] to [checking] which will create a transaction in the checking account for the correct amount. (You don't actually create the checking account transaction, let Quicken do it and then modify the Payee, check # and memo as required).

The account names I used are only representative, you will need to change them to whatever you have decided to call the accounts.

splasher

First off, DO NOT create the transaction in the checking account yet, it will be automatically generated by what follows.

After you go through the WHOLE process of setting up the account, go to the Payment Details of the loan account and change the category of the Opening Balance transaction from [lender loan] to [checking] which will create a transaction in the checking account for the correct amount. (You don't actually create the checking account transaction, let Quicken do it and then modify the Payee, check # and memo as required).

The account names I used are only representative, you will need to change them to whatever you have decided to call the accounts.

Tony_Bago

I must not be doing it right, because it is not working as you describe.

Tony_Bago

Nevermind. I see it now. Thanks!!

QWinUser

@Tony_Bago - this may help you with setting up a loan for which you are the lender -

https://help.quicken.com/pages/viewpage.action?pageId=3217587

UKR

The earlier responders all have shown you the complicated way of setting up and tracking a Lender Loan, with structured monthly payments, interest charges, etc.

But, is this really what's going to happen?
Consider a simpler approach if you don't want to go the complicated way:

• Create an Asset account "Loan to (friend's name)" with an Opening Balance of $0.00
• Write the check to your friend and categorize it as a transfer to "[Loan to (friend's name)]".
  This reduces the checking account's balance and puts a positive balance into the loan account.
• When your friend pays you back, in part or in full, deposit into Checking and categorize the payment as a transfer to the loan account. This will subtract from the loan balance until it eventually reaches $0.00

QWinUser

@Tony_Bago - I think what @splasher suggested will definitely work for your situation, but just to let you know you can start out with a zero balance when using "Convert to a Loan". When setting up the loan, put in the amount of the check (loan amount given). After the loan is completely set up, you can go into the loan register and delete the "Opening Balance" transaction (the amount you put in to establish the loan). Then the check you enter into your checking account register would have a transfer category to the loan account, which then becomes the starting point for your loan.