How to Calculate the Balance Owed on a Promissory Note

A promissory note creates an obligation to repay.
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It's not always easy, and never fun, to keep track of how much you owe on a loan. Still, tracking your progress on paying down a loan keeps the loan picture -- and therefore your financial picture -- in sharp focus. You just need to do some basic arithmetic to calculate what remains on a promissory note.

Interest-Free Loan

Step 1

Get out the promissory note. Find the original amount to be repaid. For this example, suppose the loan amount is $12,000, where the principal equals $10,000 and the interest equals $2,000.

Step 2

Find your payment records either in a payment booklet, through an online account, or using cancelled checks or bank and credit card statements.

Step 3

Tally up your payments to date. For example, if you have made 10 payments of $700 each, your total equals 10 times $700, or $7,000.

Step 4

Deduct your total payments amount from the original note amount. For example, if your payments so far total $7,000, then your balance owed is $5,000.

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