If I get an "interest only" loan, how much money a month will I be paying off to build a homeless shelter?
- JudyLv 71 month agoFavorite Answer
If you got an interest only loan for $400,000 for 5 years at 6%, you'd pay $2000 a month for the 5 years. At the end of that time, you'd need to come up with 400K to pay back the whole amount, or qualify for a conventional loan for that amount. Interest only loans are only given for a few years, and only if your credit is good and you have a solid business plan
- Brian McilweeLv 51 month ago
Go to Indeed or Fiverr and get a business plan.
- Anonymous1 month ago
How on earth would anyone here know how much your payment would be? You've said nothing about how much you are borrowing at what interest rate and what loan term.
With an interest only loan, you aren't paying off anything. You're just paying interest. Let's say you borrow 750k. You make interest payments every month for 30 years. At the end of 30 years, you have to write a check for 750k because you never paid a nickel of it back.
- SkyLv 71 month ago
NEVER get an interest-only loan. It's a scam and you will get ripped off. Banks dangle the "interest only" loan by claiming you don't have enough of a business history to get a regular loan, and say that after 5 years or so of good payments they'll refinance with a standard business mortgage/loan. But that leaves things wide open for the bank to call in the loan in its entirety at the end of those 5 years, and when you don't have all the money to completely pay off the loan, regardless of all your payments being on time and in good standing they will seize your business and all assets, foreclose the loan, and take everything. Every cent you paid during that time went to interest so you have zero equity on the loan.
That's what happened to an old friend of mine who got royally fücked over by 5/3 Bank who did the interest-only loan thing, then robbed him of everything after those 5 years were up despite everything being in good standing. They committed fraud, stole insurance money, and started seizing his property that wasn't even under the umbrella of the business LLC, and there wasn't a damn thing he could do about it because he didn't have enough money left to retain an attorney and take them to court.
NEVER do an interest-only loan.