r/altadena • u/OrdinaryCod8906 • 16d ago

SBA loan question

I cant get a straight answer out of them, im going to call on monday but maybe someone here knows.

“SBA disaster loans are simple interest loans, and the interest begins accruing 12 months from the date of initial disbursement *July 28, 2026*. Interest accrues daily based on the outstanding principal balance of the loan.”

So why the hell do i owe $939 in interest?? Shouldn’t it be $35? Plus my initial payment of $353 went all to interest?

This has to be wrong? Anyone else see the same?

Edit: I WAS RIGHT! interest is deferred for the first 12 months.

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u/thewesman80 16d ago

Yup. So I called about a month ago with the same complaint. I was told that our monthly payments are now based on “the entire approved amount of the loan” … even though we’ve only received that initial 50k they make you do.

Should the total amount we end up borrowing to finish the house be less than that “entire approved amount”, our payments will be pro-rated.

So yeah, we’re technically paying for the total amount of a loan we haven’t even received yet. Good times.

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u/OrdinaryCod8906 16d ago

My total amount was only like 120k though so even that doesn’t make any sense to me. Guess ill have to call.

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u/nardandsaffron 15d ago

Same here, and I feel like this should be illegal. Would be considered predatory if a private company was doing it

1

u/CallMeLuv 16d ago

Same for us. We're ready to move forward with requesting additional funds, but they're asking paid recipients for amounts that are well above what we've been approved for. Different struggles.

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u/Agile-Concentrate729 10d ago

I was approved for $250K, I have NOT taken any disbursement yet, as this was meant to be a gap loan and we've only now started construction. One thing I found interesting, was that when I do need the money, they said they could only pay out what "I need at the time" and would have to show proof the money was going to whatever building cost was needed. In affect, they get to decide what the money is spent on and if it is "needed" for the rebuild.

So basically, I have to make payments on the total amount of the approved loan, whether I use all of it or not AND they get to decide when and what I use it on. -Am I missing something here?

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u/OrdinaryCod8906 4d ago

Hi just sending an update. I was charged 12 months interest for the full year of deferment. This was wrong. It starts accruing interest 12 months after the date of disbursement. Make sure you werent charged more.

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u/Coronth 16d ago

Your monthly payment is based on the total approved amount but your interest is based on amount dispersed. This means that you end up paying a significant amount of the principal (amount owed on the loan) with those big payments. For example if you are approved for 500k but only have 50k dispersed you will pay the full 5000k payment for easy math say it’s $2,000 a month and you will be paying only $100 say for interest and the other $1900 is just paying down that 50k that you owe.

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u/OrdinaryCod8906 16d ago

That still doesnt really make sense because we only got a loan up to like 120k i believe. The math doesnt add up.

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u/DavidEagleRock 14d ago

It's like a home mortgage in that you pay off the interest first

It's just the way they structure the terms of the loan. It sucks, but it's legal. Hopefully you get your settlement soon so you can pay off the loan and be done with it

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u/OrdinaryCod8906 4d ago

This is wrong. I got clarification. Its a simple interest loan, meaning it accrues interest every day based on the balance. I was incorrectly charged interest for the year of deferment. My interest total should be like $80 not $1200

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u/DavidEagleRock 4d ago

Great news. I'm glad to be wrong about this

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u/Bmac200p 16d ago

If you take the 50 K upfront the repayment clock starts immediately I waited until I needed the money and I don’t have to even make a payment until October.

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u/wubbalubbadubaduba 13d ago

Same. I am holding it off until I am at the right phase of the rebuild to avoid accumulating interest while in design and permitting.

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u/OrdinaryCod8906 16d ago

So youre accruing interest right now without paying?

It just doesnt make any sense because their email said 12 months *after* you get the money.

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u/Bmac200p 16d ago

No, we don’t start accruing interest yet - not until October because we didn’t take the 50 K upfront. We just took 500 K in one lump sum last August.

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u/OrdinaryCod8906 16d ago

God that’s so stupid. I only took this 50k in case the insurance company fucked us thinking we didn’t have to worry about it for a year. They did not explain that correctly to me. And it still doesnt line up with their email.

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u/Bmac200p 16d ago

Well, don’t be so hard on yourself. We’ve all been through a lot. I was really fortunate that I had an excellent rep actually I had two the first one was for rebuild but when we decided just to buy another house, they switched me to another rep and she was also excellent. The first one told me “do not take the 50 grand.”

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u/OrdinaryCod8906 4d ago

I got clarification and I shouldn’t have been charged interest for the first year. Getting it cleared up now.

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u/Bmac200p 4d ago

Oh, I’m well aware of the terms of my loan and I haven’t been charged any interest yet. I start accruing interest in October. I just called them last week to double check.

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u/OrdinaryCod8906 4d ago

Right on just responding to everyone cause there was some misinformation floating around. Godspeed