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How to repay a microloan without overpaying
03.05.2024
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Getting a loan from a microfinance organisation is easier and faster than going to a bank. The terms are different. Microfinance organisations give money at higher interest rates than banks, and even minor delays entail large penalties. Let’s find out how to repay the loan correctly and not to overpay.

When to pay

After the loan application is approved, the microfinance organisation draws up a payment schedule according to the terms of the agreement. The terms are different, but the main thing is that the interest is daily. Payments can be monthly or the whole amount can be paid in one instalment. The main thing to remember is that repayments must be made according to the schedule. The date of repayment will be the date the funds are credited to the organisation’s account, not the date the funds are debited from your account. This should be taken into account when choosing a payment method.

What is the best way to pay: in instalments or all at once?

As a rule, microfinance organisations set up a payment schedule that you have to follow. To avoid paying more, just stick to these deadlines. If there is a possibility of early repayment of the loan, you should check whether it will be favourable.

There are companies that offer favourable loan terms only for using the loan for a certain period of time. If you repay the debt before the specified payment date, you will be charged interest at the regular rate and you will not be able to save money. If you decide to repay the loan early, you need to ask the microfinance organisation for a calculation from the current date and after paying the amount, get a certificate of absence of debt.

How to repay the loan

You can repay the loan in different ways: in cash in the office of a microfinance organisation, through a terminal, in the application or on the website of the bank according to the data, from an e-wallet or even by transfer to a card.

Cash in the office of a microfinance organisation

The most guaranteed way to repay a debt is to go to the office of a microfinance organisation, give the money to an employee and receive a document confirming repayment. There will be no commission for depositing funds.

Through a terminal

You can deposit money into the account through a payment terminal – it is convenient if there is no microfinance organisation’s office nearby, but keep in mind that the transfer may take up to five days and a fee will be charged. The amount of the fee should be specified individually.

Through online banking

You can repay the microloan through online banking or a banking application using the details of the organisation – you will find them in your copy of the agreement. The bank may charge a commission for the transfer, the amount of which will depend on the terms of its service.

Transfer from an e-wallet

Repaying your debt using an e-wallet is similar to paying via e-banking, only you’ll have to use an e-wallet website or app.

Through the microfinance organisation’s website or app

Microfinance organisations usually have their own websites or apps. In your personal cabinet you can choose the card payment method and make the payment in the same way as you would make a payment in an online shop. In this case, no commission is charged. 

How to apply for an interest-free loan

Some microfinance organisations issue interest-free loans for a certain amount: this is how they attract new clients. The 0% interest rate will be valid for new borrowers, and only if they have not violated the repayment terms.