When to payback SBA loan

While I understand your thought process on paying it back with inflated dollars, what happens if the interest rate triples or quadruples and they decide to cancel or call in all the fixed rate loans? I'd be paying it off ASAP but I don't like the thought of owing anybody anything either.

 

If I am not mistaken the SBA EIDL loan contract states that the 3.75% rate is fixed and the maturity is 30 years.
Kudos to those who plan on paying it back, but there are people who count on it being dismissed entirely. That would be travesty at its best.
It would not suprise me, if it is done by the current administration at some point.
I hope not.

 

Well if inflation hits 12%. Would you prioritize paying a 3.75% debt? Normally I'm about paying things off. But that debt is going to lose its "strength" by 8.25% a year.

The part I shrug at is where to put the money to protect it from inflation. Land, well that's gotten expensive. Buy a truck before prices go up on them year over year, we have the chip shortage, and I can't get one. But tires, I will need them but that's a couple of grand and then store them?


That's kind of the push. I don't really know a good way to protect my money from inflation.

 

So you can't pay it off early to avoid the interest?

 

Depends on how much money you have to protect from inflation .

And how soon you want to be able to access the money if you need it.

If you have over $100k and you don’t mind not being able to access it for a couple of years , it’s a very different scenario than if you’re looking to park and protect $20k and you want yo be able to access it instantly .

for $20k I’d buy pre 1963 silver coins , quarters and dimes .
Get a good safe at Your house and lock em up .
Or find a very good hiding place in your house .

It’s protected from inflation by being a precious metal that is difficult to obtain , is used in many industrial processes , and can’t be replaced or made obsolete by any new technology .

If you have $125k and want to park it for three or more years
Real estate would be the way to go .
There are apartment syndication groups that bundle money from 5-15 individual investors , to get the 30% down payment for an apartment complex that is in a decent part of town but is kind of run down.

business are valued by the profit they produce .
Increasing the profit of an apartment complex by 10% , raises the value of it by 30%

so all you have to do is increase the profit 10% , and in two years you can Refinance it and pull all of your down payment back out and your group still owns the complex .

 

#77fib77 put it in this Individual - Series I Savings Bonds (treasurydirect.gov) current rate of 7.12% for a US Government Bond that will increase interest rate with inflation.
I personally borrowed and leveraged up a few of our rent houses that were paid off at 2.7% APR and bought these bonds with the proceeds.

 

Yes.

 

I paid mine off in full the very first day that I could. I realized that I did not want to be in bed with them!

 

If you refer to EIDL, that's not the legitimate use of funds. Anyone who took EIDL, agreed to use it for specific applications. Using it for personal gain was not one of them. The fact that it hardly enforced is a different issue.
I dont really care as much as I sound but I am saying this so that someone should not admit nor encourage it on a public forum like this.

 

I did not but I still have it, ready to pay it off at any time in full with one shove. I hate debt.