Paying back a small loan. Pay “principal only”?
Recently due to financial instability, we almost lost our home. Our bank referred us to a company (which turns out to be a collections company) that offered us a loan in the amount of $ 5,000 with a 5% interest rate, which would be enough to pay our past due mortgage bills and get us back to a point where we would not lose the home.
I don’t know the specifics of the loan or anything, it was all under my father in law’s name.. who is also the owner of the home. He is very bad with money, sorry to say, and I knew he had no intention of paying this loan back, or paying on time if he paid at all, so I just decided I would pay on it myself.
I don’t know much about finances, unfortunately, but I know I don’t want another debt piling up on us.
So, the bill that comes in the mail has a little note on it that says, “if paying principal only, please write ‘PRINCIPAL ONLY’ on payments”
What does this mean, to pay principal only?