Pls HELP asap...hat does "offsetting is possible..." mean

[mmaria]

They gave me some documents to translate from English... well... it's financial and law... and I'm trying my best and checking with my friend google...

It's about returning financial means to the contractor.

Can you please, in nice and simple English explain me what does this line mean...

"I should remind you that part payments count first against interest and that offsetting is possible at any moment of the procedure"

pls! google wont explain me nicely...

If you need additional info just ask

 

[mmaria]

and sorry for the typo... It happens too often... I blame my keyboard...

 

[mmaria]

I guess no one here knows English... lol!

 

[EOV]

To offset is to counteract. Is it possible that they are trying to say that the customer is able to counteract or offset a deficit or something similar?

 

[Braineack]

you are first paying down interest, then the rest of the payment goes against the balance.

 

[mmaria]

To offset is to counteract. Is it possible that they are trying to say that the customer is able to counteract or offset a deficit or something similar?

you are first paying down interest, then the rest of the payment goes against the balance.

ok..here... we need to return to the grant provider an amount of about 431.000 $ and the interest so far (calculated for 15 days of being late with the payment) is about 1000$. For every other additional day the interest added will be 45$

so, does their line and your lines mean that we can partially make a payment with calculated interest in it and the rest would be without interest?

I'm lost here... terms offsetting, counteract, down interest...

can you simplify even more?

 

[astroNikon]

As braineack said

Any payment you make will FIRST go towards paying the Interest and NOT the principal debt.

So suppose
if you have a monthly payment of $1.000 of which is $500 interest and $500 principal
and you make a payment of $750 .. that will pay $500 interest and $250 principal

Now some debt payback terms really get interesting ....
So Suppose, with the same monthly payment of $1000 of $500 interest/$500 principal
If you make a payment of $1500
They will take $500 to pay interest, and $500 to pay principal
and $500 to pay FUTURE interest

I had a mortgage like that once. Horrible. I got out of it quickly as I normally pay ahead of schedule.

So with your example
If you made a $1.045 payment today.
It would only pay interest. No principal
And EACH day, any payment made would be used to offset ANY (daily calculated) interest payments

These are great for the debtor
Commonly known as interest only debt .. where you pay the interest only on the debt .. and the debt basically lasts forever until you get a clue.
Interest-only loan - Wikipedia, the free encyclopedia

There are offset type loans too but I think is not what you are asking about as they usually accompany a large deposit account to offset the debt ... most of this stuff is related to mortgages

 

[mmaria]

oh Thank you! Thank you! Thank you!

and what's offsetting means? I get lost in explanations on the net

 

[mmaria]

lol... after your explanation astro, Braineack's make sense Thanks Braineack

 

[astroNikon]

I edited the last part while you were responding.
There are offset type loans too but I think is not what you are asking about as they usually accompany a large deposit account to offset the debt ... most of this stuff is related to mortgages

BUT
I'm really not sure what they mean by "offset" in the small excerpt you have


fyi, i'm not a financial expert but do alot of business documents and financial reviews .. so I come across some odd things from time to time. Like my first mortgage 23 years ago.

 

[mmaria]

fyi, i'm not a financial expert but do alot of business documents and financial reviews .. so I come across some odd things from time to time. Like my first mortgage 23 years ago.

fyi... you helped me a lot... I don't have a headache anymore

 

[KmH]

$431,000 is a significant chunk of money.

At a monthly payment of $10,000 ($120,000 a year) it would take almost 4 years to pay back just the principle.

 

[astroNikon]

$431,000 is a significant chunk of money.

At a monthly payment of $10,000 ($120,000 a year) it would take almost 4 years to pay back just the principle.

I was thinking the same thing. Though I was hoping the "4" was actually a typo "$", but looking at the interest I hope not.
With that type of loan (grant ?), you have to get ahead of your payments to maximize the principal paid, and minimize the interest paid.
Otherwise, I'd hate to calculate it, but you'll be paying 3x to 4x the original loan just in interest.

My first car loan after a bad personal bankruptcy was stated as 16.7% .. but the way it was calculated made it actually 40%
double payments for 9 months, refi on a normal car loan at 10.6% .... much better normal calculations.

 

[mmaria]

guys, I've just realised that I explained nothing about the situation! I said "we" and "they" but I didn't say who actually... sorry...

I work in a municipal body and that's "we". The body applied for a project grant given by the EU ("they" in previous posts) before I worked there... They got the money, f.cked up the project activities and therefore they now have to return all the money they got.

Sorry for the language I used but trust me it's appropriate one... People who worked on the project were not aware of the seriousness of the project.... now they'll be aware what they did because complete financial blockage in the body will happen and we wont be able to receive more grants because of this experience.

My task in this whole sad story is to translate and write newer correspondence with the EU Commision. The thing is, I'm lost sometimes in "finance and law" English especially because of different regulations than ours and you guys helped me so much!