Can you Overpay a Bounce Back Loan?

For the first 12 months of your Bounce Back Loan, you are not required to make any repayments.

However, if you are in a better financial position than you were before you got the loan, you may be looking to pay your loan back faster by overpaying or repaying the money during the initial repayment holiday.

Will I get charged for overpaying a Bounce Back Loan?

You can make additional payments on your Bounce Back Loan (BBL) on a regular basis without being charged. Doing this can help you save money on your interest payments.

If you do overpay, your monthly repayments will still be kept the same, meaning you’ll pay back the loan sooner and pay less interest overall.

Are there any early repayment charges with a Bounce Back Loan?

There are no early repayment charges and you won’t pay any interest if you repay the full amount of your loan before the end of the initial 12 month repayment holiday.

If you’re looking to repay your BBL in full, you should contact your usual business relationship team and ask for a full closing balance.

Will I pay less overall if I overpay Bounce Back Loan?

Yes, since the overpayments don’t have interest added on top of them, you will pay less overall.

You will still be paying the overall amount of your Bounce Back Loan, but you will be reducing the amount of interest you pay since you will be paying it off quicker.

Will I pay less interest if I pay a Bounce Back Loan off early?

If you pay off your Bounce Back Loan before the end of the 12 month repayment holiday, you will not pay any interest and will only be paying for the total amount of the BBL.

So yes, you will be paying back less money if you pay your BBL off early.

How does overpaying a Bounce Back Loan affect Pay as you Grow?

When you make an overpayment on your Bounce Back Loan, your monthly repayments will be kept the same.

However, if you are going to do this, it’s important that you consider how it will affect your Pay As You Grow (PAYG) options.

If you make overpayments and then apply for a term extension, your term will still be increased to the maximum of 10 years.

Any overpayments made after the term extension is applied will reduce your term from 10 years. This will also happen if you apply for a six month term extension with either an interest-only payment period or a repayment holiday.

Can I settle my Bounce Back Loan in full early?

Yes, if you no longer need your Bounce Back Loan, you can choose to pay it back in full early.

This way, you won’t receive any charges of interest and since there are no early repayment charges, you won’t pay any extra for that either.

How do I make an overpayment on my Bounce Back Loan?

Before your payment holiday finishes, you’ll be able to overpay your loan in part or in full through your lender.

If you are with a high street bank, you may be able to pay through an app or by getting in touch with your lenders specialist team.

If you need support with your business finances and want to know whether you should or shouldn’t overpay your Bounce Back Loan, get in touch with our team for confidential advice.