Loan repayments, what portion principal vs interest?

Robert Mendelson Looking for a partner with a kick-ass vision who needs a strong execution partner to make it happen!

September 20th, 2016

One of my start-up investments has an outstanding loan to me, with an open-ended payback period. For each payment that I receive, what portion should be considered as interest, and what portion as principal?

Jon Lunsford Advisor at Centerpost Holdings

September 20th, 2016

It depends on what you mean by open-ended. It sounds like all interest, but it depends on whether there are any fixed repayment obligations. You may have some choices.

Neil Gordon Board Member, Corporate Finance Advisor and Strategy Consultant

September 21st, 2016

Is there a loan document? Offhand, it's generally interest first, then principal. (I don't think I've ever seen a loan document that provided for principal to be paid before accrued interest had been paid in full.)

Robert Mendelson Looking for a partner with a kick-ass vision who needs a strong execution partner to make it happen!

September 21st, 2016

There will be a document, trying to finalize details like this first. Robert Mendelson

Kelly Lefkowitz CEO at Strat/Assist, Conditioning Companies for Capital & Growth

September 28th, 2016

That would depend on the loan document and the reason you want to know what portion is interest and what is principal. Unless there is a specific term in the loan document that says payments will be applied first to principal and then to interest or according the the attached amortization schedule, you can safely assume, in the most conservative case that interest is being paid first. Apply the entire payment to accrued interest (and in the cases of cumulative accrued interest, to interest on the unpaid interest) and any excess amount is applied to principal.

patiala legitimate QUICK LOAN WE OFFER ALL KIND OF LOANS

September 16th, 2021

Are you looking for Finance? Are you looking for fast cash to enlarge your business Interested people should please contact us reply to us (Whats App) number: +919394133968 patialalegitimate515@gmail.com

Mr Jeffery

Question stats