I lent money to a family member so she could purchase a home. She is paying me back with Principal and Interest . The interest is what I have to report as income as I understand it.
You're correct, you only need to report the interest. You'll simply go through the same path as if you were entering your information with a Form 1099-INT, entering any information you have.
To enter interest without a Form 1099-INT in TurboTax Online:
Please see the TurboTax Help article What if I didn't get a 1099-INT from my bank? for an alternate entry procedure.
In case of the desktop version, would that be under "Interest and Dividends" section for "Personal Income"?