2 min read
Definition
A minimum repayment is the floor payment on a revolving facility or business credit card. Because interest accrues on the remaining balance, paying only the minimum leaves most of the balance in place, so interest keeps mounting and the debt clears slowly and expensively.
In plain terms
Paying the minimum is the slowest, dearest way out — most of your payment goes on interest, barely touching the debt.
Why it matters for your company
Pay more than the minimum whenever you can to cut the balance interest accrues on. See revolving facility interest and how to minimise interest on a revolving facility.
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