Early Payment Options and Penalties

At FundLocal, we provide flexible repayment options that allow businesses to repay their loans on terms that fit their financial needs. If your business is in a position to pay off your loan early, FundLocal offers several early payment options, and the best part is — there are no prepayment penalties. This means you can save on interest and reduce your overall loan cost without incurring any extra fees for paying off your loan ahead of schedule.

This guide covers the benefits of early repayment, how to make early payments, and the steps to take if you want to pay off your loan before the scheduled end date.

FundLocal makes it easy for you to pay off your loan early, either by making larger payments or paying off the full balance ahead of schedule. Here’s how you can take advantage of early repayment options:

1. Pay More Than the Minimum Amount

You can choose to pay more than your scheduled weekly or monthly payment at any time. By paying extra, you reduce your principal balance faster, which in turn reduces the amount of interest you pay over the life of the loan.

• Benefit: Paying more than the minimum accelerates your loan repayment, helping you save on interest charges.

• Example: If your regular monthly payment is $2,000 and you pay $2,500, the extra $500 goes directly toward reducing your principal.

2. Make Lump-Sum Payments

If your business experiences a cash influx — for example, after a profitable period or receiving an outstanding payment from a client — you can make a lump-sum payment to pay down a significant portion of your loan balance.

• Benefit: Lump-sum payments help you pay off large portions of your loan at once, significantly reducing the overall interest costs.

• Example: If you receive a large payment from a customer, you could apply part or all of that to pay down a big portion of your loan balance.

3. Pay Off the Entire Loan Early

If your business is in a strong financial position, you can choose to pay off the entire loan balance early, which immediately frees you from further payments and interest.

• Benefit: Paying off your loan early eliminates future interest payments and allows you to free up cash flow for other business priorities.

• Example: If your loan balance is $20,000 and you decide to pay it off in full, you’ll no longer have any remaining payments or interest obligations.

There are several advantages to repaying your loan early with FundLocal, including interest savings, improved cash flow flexibility, and a positive impact on your credit profile.

1. Save on Interest Costs

The primary benefit of early repayment is that it reduces the amount of interest you’ll pay over the life of the loan. By paying off the loan sooner, you lower the total interest accrued, which can result in significant savings.

• Example: If you have a loan with a 12-month term but pay it off in 6 months, you save on 6 months of interest charges.

2. Free Up Cash Flow

Once your loan is fully repaid, you no longer need to make regular payments. This can free up valuable cash flow, allowing your business to reinvest in growth, cover operational expenses, or build up a cash reserve.

• Example: After paying off your loan, you can allocate the funds you would have used for loan payments to other parts of your business, such as marketing, hiring, or inventory.

3. Improve Your Credit Profile

Early repayment can positively impact your business credit score. Successfully managing and paying off debt early demonstrates responsible financial management and can make it easier to qualify for future financing on more favorable terms.

• Example: Paying off a loan early shows lenders that your business is financially healthy and capable of managing its obligations, which may help you secure better interest rates in the future.

Unlike some lenders, FundLocal does not charge any penalties for early repayment. This means you can pay off your loan at any time without worrying about additional costs. Prepayment penalties are fees some lenders charge to discourage early repayment, but FundLocal’s flexible terms ensure you won’t face these charges.

• No Fees: You won’t be charged any penalties for paying off your loan early.

• More Savings: Early repayment reduces your interest charges without adding any extra costs.

If you decide to make an early payment, whether it’s an additional amount on top of your regular payment or to pay off the loan in full, FundLocal makes the process simple.

1. Log Into Your FundLocal Account

Start by logging into your FundLocal online account. From the dashboard, you’ll be able to view your current loan balance, upcoming payments, and any past payments you’ve made.

2. Select "Make a Payment"

In the payment section of your account, you’ll see an option to "Make a Payment." Here, you can choose to:

• Make your regular scheduled payment.

• Pay more than the scheduled amount.

• Pay off the entire balance.

3. Confirm the Payment

Once you’ve selected the amount you wish to pay, review the details and confirm the payment. If you’re paying off the full balance, the system will show you the exact amount required to close out the loan.

4. Verify Loan Closure (For Full Payoff)

If you’ve chosen to pay off the loan in full, be sure to verify that the loan is closed by reviewing your account balance, which should show as $0. You should also receive a confirmation that the loan has been fully repaid.

1. Can I pay off my loan early without penalties?

• Yes. FundLocal does not charge prepayment penalties, so you can pay off your loan at any time without extra fees.

2. How much can I save by paying off my loan early?

• The savings depend on your loan amount, interest rate, and how early you pay off the loan. By reducing the principal balance sooner, you reduce the total amount of interest that accrues.

3. Can I make extra payments toward the principal?

• Yes, you can make extra payments beyond your scheduled amount, and those payments will go directly toward reducing the principal balance.

4. How do I know the exact amount needed to pay off the loan in full?

• Log into your FundLocal account or contact customer support to get the exact payoff amount. This will include any remaining principal and accrued interest up to the date of repayment.

5. Will early repayment affect my credit score?

• Early repayment can have a positive impact on your credit score by demonstrating that you manage debt responsibly and can repay loans ahead of schedule.

If you’re ready to take advantage of early repayment options, log into your FundLocal account today to make an extra payment or pay off your loan balance in full. For any questions or assistance with early payments, feel free to contact our support team—we’re here to help!