What is PrePaid Interest?
PrePaid interest is exactly as it sounds. As a Borrower you will have a monthly interest payment. TPA will require that you PrePay a specific amount of payments, to TPA. TPA will hold the interest in a TPA escrow account. If you default, we will use the interest to collect and stabilize the debt. If you make the equivalent of interest payment's, then the PrePaid interest is released to you.
4-Months of interest are Prepaid.
Borrower receives a quote, calling for 4-months of interest to be PrePaid.
TPA holds the PrePaid interest in a IOLTA account.
Borrower draws funds for project.
Borrower makes 4 successful interest payments.
PrePaid interest is released back to Borrower.