Timeline of construction financing

Hello everyone

I need some enlightenment in the banking world.

I would like to know from when the full installment for the loan is due?

Loan amount x (let's say €500,000), the amounts will be transferred to me depending on the construction progress or the submission of invoices.

Is the 1st installment of the loan then due when

a) the total amount has been paid out?

b) proportionally to the amount of the disbursement starting with the 1st transfer?

c) in full with the 1st transfer?

Thank you very much for the feedback.

Hello, if the amount has been taken up in one sum and not split, you only pay interest on the withdrawn amount, so the installment increases but never as high as agreed. Additionally, you pay commitment interest on the unused loan amounts as agreed in the contract. It is common practice to grant a 6-12 month interest-free period for the commitment interest. You pay the agreed installment starting the next month after the full disbursement of the loan. Hope that is somewhat understandable.

I would like to know from when the full installment for the loan is due?

As agreed with the bank, usually one month after full disbursement. With KfW, for example, there are always years without repayments.

As agreed with the bank, usually one month after full disbursement.

I thought that was always the case, but I have learned that there are banks that agree the repayment starts from the loan start date plus a "repayment-free" period. So it's better to ask in individual cases.

Look into the contract. In our case, the interest (not repayment) was due after calling up a tranche. In addition, after 12 months, commitment interest was charged on the amount not yet drawn. The repayment and thus the previously agreed installment started after full disbursement.

Look at the contract. For us, the interest (not repayment) was due after drawing a tranche. In addition, after 12 months, commitment interest was charged on the amount not yet drawn. The repayment and thus the agreed rate in advance started after full disbursement.

That is certainly the most common variant.