The 19-year-old could have already made his bow for Michael O'Neill's side but asked not to be considered in a bid to try and break into the first-team at Anfield.
This sparked fears that the right-back was considering defecting to the Republic of Ireland but McLaughlin says this was never a consideration.
"I'm a catholic from Belfast and people think I probably supported the Republic as a kid so they then think there is something in it... maybe I'm not playing because I want to switch to the Republic," said McLaughlin, who has yet to play for the Liverpool first XI, but made nine appearances on loan at Barnsley last season.
"To be fair, they have a right to think that because players have done it in the past and players have moved, but I met Michael face-to-face and I told him my reasons.
"I know supporters will be paranoid about it but I have no problem with that because I understand where they are coming from.
"When previous international breaks were on, the Liverpool first team were having games behind closed doors. Brendan Rodgers was there and I thought it was a brilliant opportunity for me.
"I didn't think I would play much for Northern Ireland so I thought it was best for me to stay at Liverpool and concentrate on that.
"People will believe what they want to be believe but that was the truth."
Having received his international call for Friday's friendly clash in Uruguay and the game against Chile on 4 June, McLaughlin says he is now looking to make the step up for his club.
He faces strong competition for a place with Glen Johnson, Jon Flanagan and Martin Kelly ahead of him in the Anfield pecking order but is hoping that the addition of European football to the Reds fixture list will help his cause.
"Liverpool are in so many competitions next season so hopefully I will get a chance because we will have to rotate the squad a bit," he said.
"The manager has shown he will take a chance on young players. Look at how Jon Flanagan came out of the blue under Brendan and took his chance.
"I know where I want to be and that is Liverpool. I will set my goals high; I want to make a name for myself at Liverpool and do well for the club."