Insights & Advice From Bank Of Tennessee

Advice

Repaying a Business Loan

If you're trying to pay down some of your business debt, you might be wondering how long it might take by making the standard payment, or what the impact might be if you increased the monthly payment each month. If you increase the monthly payment, the amount of the increase typically gets applied directly to reducing the amount owed, or principle. Reducing the amount of money you owe will reduce your interest charges each month, as the interest rate will be applied only to the outstanding loan balance. An increase in your monthly payment will lessen the amount of interest charges you will pay over the repayment period and shorten the number of months it will take to pay off the loan. Most loans require you to, at a minimum, cover the monthly interest costs on the outstanding balance and if it is a traditional, or amortized loan, you'll always be required to make the agreed upon payment at a minimum.

Please Note: Information and interactive calculators are made available only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.