Draw Period

The meaning of Draw Period is the period of time during which a borrower can draw funds from a Line of Credit’s available credit limit. This loan type makes available a set amount of funds that you can borrow based on the credit limit you qualify for.

The Minute Loan Center Draw Period

During this period, you’re allowed to draw funds from your Line of Credit, as needed. There are no minimum withdrawals, but there’s a credit limit that sets the maximum amount you can draw at a time. You’re only required to pay interest on the borrowed amount, and we send a monthly notification of the interest due.

If you choose, you may also repay the borrowed amount, and the more you repay, the more you free up funds to draw again in the future. So, you have the flexibility to take out money, repay, and borrow again repeatedly, up to the close of the Line of Credit. A Minute Loan Center Line of Credit lasts several months and can be renewed repeatedly.

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How To Prepare For the End of The Draw Period

When the draw period ends, meaning you can no longer access the Line of Credit funds, and your account shifts into the repayment phase, you’re required to start to pay off the principal balance — unlike previously, when you’re only required to make interest payments. Keep in mind that the new monthly payments will be significantly higher and, if you’re unprepared, the sudden increase may strain your budget. To avoid financial strain, start planning for the big payments early, way before the draw period ends. Here’s how to get ready:

• Start repaying the principal early: Begin paying toward the principal balance early to reduce the principal amount you owe. Even small increments beyond the monthly interest can help reduce your overall debt. The smaller your balance is when the repayment starts, the easier it will be to make the monthly payments.
• Understand your debt obligations: Towards the end of the draw period, take some time to review your account. Find out the exact amount you owe, the time allocated to repay it, and how much the monthly payments are likely to be. Also, take note of the fees and penalties that come with late and missed payments. This will motivate you to avoid them.
• Adjust your budget: Understanding the meaning of draw period is crucial here. Prepare your budget for the upcoming new entry. Make tweaks here and there to free up some money to accommodate a payment larger than the interest you have been paying during the draw period.
• Choose a suitable repayment option: Given your current financial position, decide on the best way to repay your balance: whether from your regular income or alternative sources such as taking on a low interest Installment Loan to consolidate all your debts to make the payments more manageable, while reducing the overall interest costs.

Minute Loan Center offers a range of credit products to cater to various financial needs. To apply for a fairly priced loan, register today.

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