Payments

Does paying earlier in the month save interest?

It is a fair question from any director watching costs: if interest builds up day by day, does paying a repayment or overpayment a few days early actually save money? The honest answer is "sometimes, and usually only a little".

When it helps

On an interest-bearing facility, interest accrues on the outstanding balance each day — see how interest accrues day to day. So an overpayment made earlier reduces the balance sooner and stops interest accruing on that amount from that day. For a genuine overpayment, earlier is marginally cheaper.

When it makes no difference

A scheduled repayment is calculated to a set date, and paying it a couple of days early does not usually change the total you owe — the schedule is fixed to those dates. Paying early here buys peace of mind, not a discount. And on a fixed-fee product like Credicorp Slice, the cost is set as a flat fee rather than daily interest, so timing within the month does not change it — see how Flex and Slice repayments differ.

The bigger lever

If your aim is to cut the cost of borrowing, a lump-sum overpayment or full early settlement moves the needle far more than nudging a payment a few days earlier. See how early settlement works and does an overpayment reduce my payment or term.

Credicorp lends to companies rather than to you personally, so this is business finance outside the consumer-credit regime. That does not change the practical steps below.

See also: How does interest accrue day to day?, Can I overpay to clear faster?, How early settlement works.

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