What is a poultry loan interest rate?
Poultry loan interest rate is the fee charged by a loan provider for giving the loan money.
This interest rate is the cost that the poultry loan provider receives from the borrower.
It is given for doing the service of lending.
Interest is received in part payment, usually scheduled every month or quarter (3-months).
Why is a poultry loan interest rate important?
Poultry loan interest rate is the key to calculating the real cost of borrowing.
Interest is quoted as a percentage and is applied against money outstanding to be paid.
The rate is agreed in advance and a loan schedule tells you how much you need to pay.
This helps you plan your budget.
Clearly, the loan repayment (plus interest) is a legal obligation.
Failure to do so can lead to legally enforced repossession. So calculating the cost of borrowing is critical.
Best practice
Calculate the interest accurately
When estimating the cost of your poultry farming loan, make sure you calculate the interest charges accurately.
Interest on loans is compounded according to repayment intervals.
In other words,
Different actual charges of interest apply depending on your chosen interval of repayments.
So,
Monthly repayments will have a different application of interest to quarterly – for example.
Use a reliable loan repayment calculator to estimate your repayment schedule.
Further reading: Calculate interest on loan – Mozo
Planning your loan repayment schedule
Tie in your loan repayment schedule into your future farm cashflows.
Carefully consider your ability to cover all direct expenses as well as indirect expenses, like your loan repayments.
Map out your payments against projected cash flow to ensure you are covered.
A non-negotiable expense
I can’t stress it enough that loan repayments are a non-negotiable expense.
REMEMBER:
…the repayment of borrowed funds you receive for a poultry farm loan is secured against the ownership of your farm property & assets.
You are not in a position to scrimp and save on loan repayment monies – you risk losing it all if you do.
For this reason, I have a personal recommendation for how to start a poultry farm with zero debt.