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LSDefine
Simple English definitions for legal terms
paydown
Read a random definition: clear and convincing evidence
A quick definition of paydown:
Term: PAYDOWN
Definition: Paydown refers to a loan payment that is less than the total amount of money borrowed. For example, if someone borrows $100 and makes a payment of $50, they have paid down the loan by $50. This means they still owe $50. Paying down a loan can help reduce the amount of interest that accrues over time and can help the borrower pay off the loan faster.
A more thorough explanation:
Definition: A paydown is a loan payment that is less than the total loan principal.
Example: If you have a loan for $10,000 and you make a payment of $5,000, that payment is considered a paydown.
Explanation: A paydown is a partial payment made towards a loan. It is not the full amount owed, but rather a smaller amount that reduces the overall balance of the loan. In the example given, the borrower made a payment of $5,000 towards a $10,000 loan, which means they still owe $5,000. This is a common practice for borrowers who may not be able to make the full payment, but still want to reduce their debt.