First Dragon: Bank Loans

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This is the first step on rising up and getting out of the deep mud created by the pandemic. First I have to tackle a dragon of cash out flow. Bank loans.

Bank #1: Inter Asia Development Bank

I have been with IADB since  2014 and we have already built a very long and good relationship. Although their interest rates are quite high especially when I was just starting with them (I started at around 4.5% a month), they have always been very understanding.

My last loan with Inter Asia was granted just last December 2019. This was my interest rate with it.

Term: 24 months
Annual Interest Rate: 26.58%
Monthly Interest Rate: 2.215%
Interest Type: Diminishing balance

I was not able to pay any amount since March 2020, making my account stagnant. I sent them a message and thought of asking them what we can do together to avoid any bigger problems with my account. I have applied if we can reconstruct my loan and allow me to pay just the interest amount every month. I submitted the letter and they agreed with it. They calculated my remaining principal balance and added up the accrued interest which will make up for my new principal balance for the reconstruction.

Now all I have to pay monthly for the next 12 months is just the interest which is actually lower than the earlier account! About 1.35% of my principal balance is all they are asking every month as interest fees! That’s even lower than the previous one. Then from the 13th month on wards, I can pay the diminishing interest and principal. 

Bank #2: Mount Carmel Rural Bank

I have been with MCRB since 2017 and they are also a good bank. They offer a lower rate and truly care for their partners. I called them the other day to ask about the situation of my loan account and I was surprised that they have already extended my loans for 3 months. They are actually about to come to me and ask about me and my business on the same day I called them.

My current rate with them is at 2% monthly interest of remaining principal amount.

I told them my situation and asked them what’s the best thing to do. My account manager told me that the best to do right now is ask for another 3 months extension. They will not charge monthly fees for the next 3 months. Which is another great news because it allows me to keep on rebuilding my cash flow while minimizing cash coming out of the bucket. That was a really big help!

He didn’t end there, he also told me to make enough good cash flow for the mean time then we can file a reconstruction of my loan to adjust it to just paying the interest fees every month. For now I just have to focus on the next 3 months. July to September.

Bank #3: AIMCoop

Lastly is AIMCoop. Aim coop is not actually a bank but a Cooperative. I talked to the manager today to ask for help on what we can do with my account with them. My accounts with them has lapsed already last December 2019 so this is not a good situation. At first the manager was not very flexible. She can’t say any option but paying what is due immediately. But when I started asking her questions, that’s when she started showing other ways solve my problem.

It is required to make a share in the capital of the coop before you can borrow any amount of money. I reviewed my balance and discovered that I have about 140,000 still in tact. I suggested if I can use this amount to pay my balances which have already accrued a huge amount of interest. Apparently I can do that. So I filed. And then I also asked about their new programs and discovered that they now have a new program with an extremely low low low annual interest of just 9%!

I shocked how low it is compared to my existing loan with them which is 30% annual diminishing interest. Now this is the lowest interest rate I have ever heard from any money lending companies before.

  Previous New
Annual Interest Rate 30% 9%
Monthly Interest Rate 2.5% 0.75%
Interest Type: Diminishing balance

Next Step

Currently, AIMCOOP has the highest interest rates charged every month at 2.5%. But they also have the biggest potential because of the new interest rates of just 0.75% a month! I have to tackle this loan first. All I have to do is pay my principal amount down to 50% balance. If time has come that I have paid the 50%, I can now renew my loan with the new rates. I will use that money to settle other loans allowing me to save tremendous amount of future expenses.

Conclusion

So far, I have already secured huge deals for my bank related responsibilities.  The fight is far from over but I’m seeing great progress.

One last thing, I also borrowed money from my auntie and that have to be addressed. I asked her if I can bring down the interest of her money from 2.5% monthly to 4% per anum. She said yes!

 

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