Understanding Your Microloan Repayment
A Windmill microloan is categorized as an installment loan, which means that you are required to make regular monthly payments until the loan is fully repaid. The amount of each payment is based on the total amount disbursed to you under the terms of the loan.
Key Elements of Your Microloan Payments
Outstanding Balance: When you log in to the Windmill Client Portal, you can view the Outstanding Balance of your loan. This balance includes all the principal and interest that you owe.
Interest Calculation: Interest on your loan is calculated daily based on the borrowed amount and the duration of the loan term. The total cost of borrowing, including how interest accrues over the life of the loan, is outlined in the Loan Disclosure Statement you signed when accepting the loan.
Impact of Loan Restructuring: If you request a restructuring of your loan, such as extending the term or lowering the payments, the overall cost of borrowing will change. Extending the loan term will generally increase the total amount of interest you pay because you are spreading the repayment over a longer period.
Application of Payments: Payments received from your account are applied in the following order:
- Outstanding fees
- Outstanding interest
- Principal balance
Any excess payment after covering these areas is directly applied to reduce the principal balance further.
Example of Payment Allocation: If you miss a payment, the next payment you make will first be used to cover that missed payment before being allocated to the current due amounts.
Additional Information
For those interested in a deeper understanding of installment loans and how they function, resources like Investopedia offer detailed articles that explain the mechanics behind these financial products.
By staying informed about how your loan payments are structured and applied, you can better manage your finances and work towards successfully fulfilling your repayment obligations.