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How do i account personal loan

shaikh sahid (36 Points)

17 February 2023

How do do accounting of personal loan

Eg- taken personal loan of 500000

Exclude processing and other charges.

At Roi-19%. Tenure 48 month .how do i kepp this loan account

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4 Replies

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 17 February 2023

Personal loan is not accounted in your business accounts. Any expenditure incurred for loan and interest paid from business for such loan will be treated as drawings.

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shaikh sahid (36 Points)
Replied 17 February 2023

But that loan has come in my business account and i am using it for business then what should it be

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 17 February 2023

But the nature of loan is still personal. If you are using this loan in business then ideally it will form part of your capital and then expenses on such loan will be treated as drawings as mentioned earlier

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PARUL YADAV (finance expet) (93 Points)
Replied 10 July 2024

To account for a personal loan from Kotak Mahindra Bank, start by noting the loan amount received as a liability in your balance sheet. Record the monthly EMI payments, which include both principal and interest, by debiting the loan account and crediting your bank account. Ensure you differentiate between the principal repayment and the interest expense. Kotak Mahindra Bank provides detailed loan statements, which can help track the breakdown of payments. Regularly updating your records will help manage the loan efficiently and maintain clear financial statements.