If you received an EIDL loan – not the Advance – or if, confused by the application form, you inadvertently requested a Loan on top of the Advance (we’ve heard it happened 😉), you can start paying it back now, or even pay it back in full, to avoid paying interest.
To refresh your memory, the EIDL program by the SBA was divided into two parts: the Loan and the Advance. The Advance, which was capped at $1,000 for freelancers, does not need to be repaid. But the Loan, which is a 30-year loan with a 3.5% interest rate, can’t be forgiven and needs to be repaid. You started accruing interest from the day you received it. So you already owe some.
Even though your first payment isn’t effectively due until 1 year after you received the loan, you can pay it off (or at least start) now to stop or lower the interest you pay. There is no prepayment penalty but the SBA won’t send you a statement or a stub until you actually need to start paying it back (so one year after you received it.)
So, if you’re ready, here’s how to do it:
1. You need to create an account on the CAFS site from the SBA.
If this is your first time there, click on Not Enrolled Yet .
2. Enter all the information requested.
- In User Type, select Borrower
- The Financial Commitment ID is your Loan Number.
If you didn’t write it down, you can call SBA Customer Service at 800-659-2955 with your Application number (which is the number that you received via email when you applied) and they’ll be able to give you your loan number.
3. Once your account is created, you will need to confirm it by using a one-time verification code sent to your phone.
4. Once you’re in, in the top left corner, click on Borrower / Borrower Search.
5. A list of your loans will appear. If you also received a PPP, it will show up there as well. Your EIDL loan is the one listed as DCI in the Loan Type. Click on your Loan Number.
6. On the next screen, you will see the status of your loan, and how much interest you have accumulated so far. Scroll down to the Payment box, and click on Go to pay.gov to make a payment.
7. You will be taken to another site. In the middle of the home page, you will see a box that reads Make a SBA 1201 Borrower Payment. Even though you didn’t receive a payment notice (again, you won’t receive one until you’re required to make a payment), you can still make a payment. Click on Pay it right here.
8. Read the instructions on the next page and click on Continue to the Form at the bottom
9. Fill out the payment form. Enter your loan number and if you want to pay it in full, make sure to also include the interest in the Payment Amount.
10. Enter your banking information to process payment.
Note: Interest adds up daily, so if you want to pay in full, make sure to choose the Earliest Payment Date and to process your payment during business hours, Monday to Thursday. If you submit your payment on the weekend, by the time it gets processed more interest may have been added to your account, and you might still owe some money on the loan.