First and Last Payment
Did you know that you could secure a business loan without paying a single dollar as a down payment? Well, now you know. $0 down payment loans are available for entrepreneurs who need money to start or expand businesses. You can also apply for such loan to pay salaries, pay business bills, and buy business furniture, machinery and equipment.
When do I make the first payment?
Depending on the type of loan that you borrow, you can make the first payment in varied times. For example, you may be allowed to make the first payment in 90 days. This gives you a good opportunity to put the loan to some good use before you can start paying it.
The first payment is a very important question, usually, the first one that you should ask when you are borrowing a loan. Mostly, the lenders will not require you to make the first payment in the very first month of getting the loan. However, since this is something that differs from one lender to another, it is prudent that you ask this question before putting your name on the dotted line.
Now, when it comes to the loan repayment, there are two things to bear in mind. One is that you will be paying the principal amount that you borrowed and secondly, you will be paying the interest rate on the amount that you borrowed. The interest is the cost of the loan.
For a small business owner just starting out, it is best to go for the amortized schedule because it shows the amount of interest that you are paying on the loan. It also shows the payment dates, as well as the first and last payment for the loan. There can be no confusion at all and it is also possible for you to automate your loan repayments so that you do not miss a payment. Even if you do not automate payments, you will know without a doubt how much you are supposed to pay and when.
You can also be clear when you are supposed to make the first, last and indeed all other payments. Remember, when you make a late payment, you will be penalized. So will you when you make an early payment. Loans need to be paid on time.
However, there could also be a discount for early repayment. One benefit is that the remaining interest rate could be wiped off, thus saving you money, that is, if you were using the amortized schedule. However, if you are using the other method where the first payments go to pay the interest rate first, you may only get a discount on the interest rate.