How to Prepare an Annual Loan Interest Statement

What should appear on an annual interest statement?

A year-end loan summary may show the lender and borrower, loan reference, reporting calendar year, loan rate and interest method, beginning loan balance, interest accrued in the year, interest actually paid in the year, principal repaid, and ending principal balance.

Interest accrued versus interest paid

Interest accrued represents interest calculated for the year's days on outstanding principal. Interest paid is the amount of actual borrower payments allocated to unpaid interest within that calendar year. They can differ if the borrower misses a payment or pays late.

How to build the yearly figures

1. Start with the correct loan origination balance and all prior payments.
2. Apply payments chronologically under the loan's day-count, accrual and allocation rules.
3. Separate interest accrued during the calendar year from amounts of interest received during that year.
4. Check the ending principal against the lender's records.

Generate a statement online

Use the Annual Loan Interest Statement Generator to produce a printable worksheet. For recurring statements across multiple loans, see Private Loan Manager.

Tax reporting is separate

This free worksheet is not IRS Form 1098 and does not determine the deductibility of interest. Confirm any tax reporting responsibilities and loan-specific classifications independently.