An overpayment is any amount you pay towards your facility on top of the scheduled instalment — a one-off lump sum, a regular top-up, or simply rounding a payment up. It reduces your outstanding balance faster than the schedule alone.
What it does
On an interest-bearing facility, reducing the balance means less interest accrues from that point, so overpaying lowers the total cost of borrowing. You can usually choose whether it shortens your term or reduces future payments. See how overpayments are applied and does an overpayment reduce my payment or term.
Overpayment is not a payment holiday
Paying extra one month does not remove the next scheduled collection unless we agree that — the two are separate. See does an overpayment change your next collection.
Related terms
See settlement figure and running balance.
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.
A worked feel for it
Say your company has an interest-bearing balance and a strong month lets you put an extra amount in. That extra comes off the principal, so from that day interest is charged on a smaller figure — the saving is not dramatic on a single overpayment, but repeated overpayments across a term add up, and clearing the balance entirely stops interest altogether. The key discipline is only ever overpaying money the company genuinely does not need for its normal outgoings and its buffer, because an applied overpayment is not a savings pot you can pull back on demand. If you might need the cash again, a revolving Flex line behaves differently, freeing headroom to redraw.
See also: How overpayments are applied, Can I overpay to clear faster?, Making a partial overpayment.