What is a minimum payment?

by paolo.leuschke , in category: Banking and Credit , a year ago

What is a minimum payment?

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1 answer


by mandy , 10 months ago


A minimum payment refers to the smallest required amount that a borrower must pay towards their outstanding balance on a loan or credit card in a given billing cycle. It is typically a percentage of the total balance or a fixed amount set by the lender or creditor. Paying only the minimum payment helps to fulfill the repayment obligations but may result in high-interest charges and an extended repayment period. It is generally advisable to pay more than the minimum payment if possible to reduce interest costs and pay off debts more quickly.