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SBA COVID EIDL Loan Repayment Update

Many Alabama SBDC clients are getting ready to start repaying their COVID EIDL loans, and the CAP team is receiving several questions about repayment. Currently, the most common issues are related to interest accrual and the start of payments. We’ve provided information on the relevant topics below. Still have questions? Contact your Alabama SBDC advisor or reach out directly to the SBA at COVIDEIDLServicing@sba.gov.

Interest Accrual

As outlined in the Loan Authorization and Agreement that you signed, interest on the COVID EIDL began accruing from the date of the advance. SBA provided a deferment period of 30 months from the date of the advance, meaning most clients were not making payments on their loan. However, interest was accruing during this time and will continue to accrue on the loans during deferment. What does this mean? When you log in to the MySBA Loan Portal to access your loan details and begin making payments, the balance owed will be higher than the original advance. This is due to the accrued interest over the deferral period.

Deferment Details

Due to the continued adverse effects of the pandemic, SBA provided a deferment period of 30 months from the date on the original Note for COVID EIDL borrowers. As noted above, interest will accrue on the loans during deferment. You are responsible for your COVID EIDL monthly repayment obligation beginning 30 months from the disbursement date shown on the top of the front page of your Original Note. During this deferment:

  • You may make voluntary payments without prepayment penalties.
  • Interest will continue to accrue on your loan during the deferment.
  • If you do not make voluntary payments during the deferment, a final balloon payment will be due on your loan at maturity.

Making Payments

Create an account in the MySBA Loan Portal (lending.sba.gov) to monitor your loan status or to make payments. Payments will be applied to interest first, from the date of the receipt of the payment (not when you send it). If you have a large amount of accrued interest from the deferment period, it may take a while to start seeing your payments applied to your principal. Interest is compounding daily, starting from the date of your advance.

For more information on managing your EIDL, including options for borrowers facing financial hardship, requests for lien subordination, and other servicing actions, see https://www.sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan/manage-your-eidl.

The Alabama SBDC cannot access your account with SBA.

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