Full Guide: Everything You Need To Know About Working Capital!


When we talk about sustainability and the growth of a business it is necessary to keep in mind that these two factors depend directly on how the financial health of that company is. If the accounts do not match, if the return is still lower than the investment and if there is not enough working capital to support the venture’s activities, many problems may arise.

According to a study conducted by Sebrae-SP , about 27% of new companies in Brazil close their activities in the first year of operation. This number grows even more and reaches 50% when we talk about deals that close the doors in the first four years of existence.

The same research also reveals that among the main causes of bankruptcy in the country is the lack of planning with regard to working capital . This is because, despite being an essential concept and an important part of the financial management of any business, many business owners consider it as secondary.

Much of an organization’s success is fully tied to good management and positive financial health. So, to help you understand what is working capital , how to calculate, how relevant to your organization’s economic sustainability, and what good results it can bring, we have prepared a complete content.

Continue reading this article and understand everything you need to know about working capital!

What is working capital?

As important as the definition of social capital is the definition of working capital. Therefore, this should be one of the first steps taken by the entrepreneur.

We can understand working capital as all short-term demanded assets in a company. That is, how much the business has to bear the fixed and variable costs and expenses, or the amount that keeps the organization while the money does not return to the cashier. Finances need to be in order and there must be a balance between what goes in (current assets) and what goes (current liabilities).

Thus, working capital is composed of:

  • Assets available: money that is already in cash to pay the day to day bills;
  • Stocks: amount of resources you need to keep in the company stock;
  • Customers to receive: The amount that you need to have to be able to finance the term of payment you give to your client.

We can not therefore confuse working capital with the fixed investment of a business. The latter, in turn, represents the entire structure that has already been acquired for the initial operation of the company, such as real estate, equipment or raw material.

A good example for the use of working capital are the periods of seasonality. It is common that some months are better than others for any company and that sometimes the break-even point is not reached.

It is at this point that well-planned and well-structured working capital makes all the difference. When this happens, it will be responsible for meeting the basic financial demands, such as the payment of employees and consumer accounts.

Within the macro concept of working capital, there are some other specific definitions of the need of each company. Understand what they are:

Net working capital

Net working capital

The net working capital takes into account the ease with which that asset can be reverted in money so that the entrepreneur can account for the financial commitments assumed in the short term by his business.

In this way, it represents the amount of financial resources of the company, except for real estate, since they are not available for day-to-day use.

Negative working capital

Negative working capital

Being with negative working capital means that the organization is spending more than it receives and even summing up all the available resources will not be enough to pay all bills.

It is worth noting that if the company is in the beginning or in the expansion phase, it is common that the costs and investments are greater than the return to the cash. This situation should become worrying if it is extended for long periods.

Own working capital

It is the amount the company has to sustain itself and keep running without the need to borrow. Here, all the counts are in equilibrium and the difference between the assets and the current liabilities has a positive balance.

Working capital linked to investments

Working capital linked to investments

Working capital can also be used to cover expenses that the company has during the expansion period. For example, if the entrepreneur invests in new technology to increase production, it is necessary to have working capital to finance the largest quantity of raw materials that will be used.

Is there a difference between working capital and cash flow?

The answer is yes! Just as the meaning of working capital can be confused with the fixed investment of a company, some people also mix it with the concept of cash flow . Although complementary, it is important to understand that the two are different things.

While cash flow is characterized by the way money is managed by the organization and by the cash input and output movement, working capital is the value that the firm has to use, ie it is the difference between what went in and what came out.

And between working capital and stock? Is there a relationship?

And between working capital and stock? Is there a relationship?

The answer here is also yes. Nowadays, there is still a large number of companies working with stock of products and, therefore, it should be seen as an integral part of working capital. In addition to representing the money that will come into the box in the future, the stock also generates expenses, such as transportation and maintenance.

How important is working capital to your company?

How important is working capital to your company?

In addition to ensuring the organization and financial health, thus enabling sustainability, internal development and business expansion , knowing how much your company needs to remain facilitates and helps in administration. Calculating working capital correctly also brings some benefits that allow more assertive and therefore more efficient management. See below what they are:

1 – Assists in risk assessment and management

As we have already said, well-defined and structured working capital is part of the strategy of running a business. It guarantees liquidity to the company and can be converted into cash whenever it is needed. It is at this moment that it also contributes to risk management.

Both in small and medium or large companies, when this analysis is not done correctly can cause many financial, operational and even legal damages. By considering working capital as the main element of cash flow, a risk assessment follows the budget and warns of potential vulnerabilities in the company. In this way, it is possible to anticipate and prevent them.

A good example for this case is the goal setting for default rates. By means of this analysis it is possible to establish the limit point so that the company budget is not impaired and the working capital is not impacted.

2 – Ensures more predictability

2 - Ensures more predictability

Besides losing the credibility of the market, a company that is indebted also has its growth compromised. Therefore, being on the predictability of your finances up-to-date is extremely important to ensuring the organization’s balance.

Since working capital is responsible for paying the short-term accounts, it is possible to plan the future better and avoid short- and medium-term problems and debts that may arise.

3 – Improve financial management and control

3 - Improve financial management and control

Working capital signals how much the organization needs to maintain its own operation. In this evaluation must be understood all stages of the production process, from the raw material to the return of money to the cash.

It is the manager’s role to keep up with deadlines and values ​​in order to anticipate any need for capital. Being aware of this behavior is very important and helps the entrepreneur to understand the business routine, the needs of the business, the verification of the processes, the financial control and the decision making.

4 – It drives the growth of the company

4 - It drives the growth of the company

In the business world the opportunities can arise at any moment and you must be attentive and prepared for them. To invest in more modern structures, open new branches, adopt the franchise system or even buy other companies is necessary to have a short term net amount available for such. That’s why, when we talk about expanding a company, having an organized working capital makes all the difference.

What are the risks that poor working capital control can bring to your company?


As we mentioned in the above topics, planning a financial control and knowing the exact amount of working capital are things that bring many benefits to any company.

In addition to identifying the best time to buy, it will be possible to estimate the terms that your business can take and avoid the imbalance between payments and receipts. The short-term accounts are paid, the cash remains positive and there is the possibility of creating wealth in the long term.

When control of working capital is not done correctly, the operational risks to the company increase, jeopardizing the smooth running of internal activities and running the risk of leaving the cash in the red due to the debts that have accumulated.

This inefficient financial management can be considered as one of the main reasons for the breakdown of a company . Unfortunately, if the money is not enough, the company can not resist and can go bankrupt. Therefore, it is indispensable to carry out this control.

How to calculate working capital?

How to calculate working capital?

To begin calculating the ideal working capital of your venture you need to identify all the variables that are related to the operation of the business. Some factors that may influence the amount required are:

  • The type of business: commercial companies, industries, banks, utilities, among other types of business require different sizes of working capital, since the demands and the cash flow are also different;
  • The size of the business unit: working capital calculation depends proportionally on turnover;
  • The turnover of stocks: this ratio is also proportional. For example, if a company’s stock is large, but turnover is slow, there is a greater need for working capital;
  • The production process: a longer and more complex manufacturing process requires a larger working capital. The type of production is also an influence factor, depending on whether the company operates with machines and automation or with salaried labor;
  • Conditions of purchase and sale: if the company uses credit to make their purchases, the working capital may be lower. Now, if sales are also made on credit, working capital must be higher.

Now that you’ve defined and identified the points that help determine the value of your working capital, it’s time to put your hand in the dough and do the math!

First, you need to know what are the current assets (AC), that is, all the resources that, when added together, generate the company’s revenue (cash, inventory, accounts receivable or financial investments). We can consider them as investments, and the larger they are, the longer the average term to return in cash and the more resources will be needed to cover this period.

In addition, you must also plan your company’s fixed cost (expenses such as rent, energy bill, water bills or salaries) and have an estimate of the variable cost of the company (accounts related to the purchase and sale of your products, such as raw material or equipment). To the sum of these two we can give the name of circulating liabilities (PC).

Once you have these two variants determined it is possible to calculate the working capital (CG), which can be represented by the following formula:


Let’s suppose that a company has $ 40,000 to receive from its customers and $ 50,000 of accounts to pay, putting in the equation would look like this:

CG = R $ 40,000 – R $ 50,000

CG = – R $ 10 thousand

This means that the working capital requirement of that business so that it continues to run is R $ 10,000.

The result of this formula can be the key to both success and failure of many ventures. Hence, it is important to calculate working capital correctly and treat it as one of the priorities of your business.

If there is any difficulty in determining such numbers, it is advisable to find a specialist in the area who can guide you.

How to get the working capital for your company?

How to get the working capital for your company?

After figuring out what amount you will consider to establish as business working capital , it is time to find the sources that will help you organize it. If your business is already spinning on its own, and if the account between the lead time of the customers, the size of the inventory, and the vendors’ payment deadline closes positively, you’re doing very well.

Some basic tips are to shorten the time to receive your company, try to negotiate better with your suppliers, optimize inventory and align bonuses with the commercial, sales and control teams so that they worry about securing the best payment times for each one of the areas.

But not all cases are easy this way. It is very common that some start-up companies that need the resource to expand are not able to obtain working capital on their own and therefore need to use expansion strategies or help from third-party sources.

Especially for micro and small business owners, an extra income is critical while costs are still higher than earnings. At such times, joining loans is a recurring practice and when done in an organized and planned manner will bring many benefits and will serve as a kick to leverage business activities.

Understand what are the main modalities that can be used as working capital:

Financial Services

Financial Services

In the vast majority of cases, equipment and materials can be financed by companies. Here there are interest rates previously set and the payment term may be longer. The great difficulty is that there is a demand for real guarantees, such as real estate, own resources and even the object that was financed.

Credit card

Credit card

In addition to channeling all expenses in one place, the business credit card also allows for financial planning and control. The payment can be done at once, avoiding possible interest, or in installments.

But beware: if not used properly the credit card can pose a danger and, over time, become a good snow.



The main advantage of overdraft is to be able to be used in an emergency situation, since it is a credit limit available in the checking account in addition to the positive jump that there is. But just like the credit card one needs to use responsibly because the interest rates are too high and can result in a large debt for the company.

Online Unsecured Loans

Online Unsecured Loans

One of the simplest, quickest and cheapest ways to guarantee your company’s working capital is to opt for unsecured loans online . In addition to having more advantageous rates for the entrepreneur, they are well bureaucratic than the conventional loans. You receive the reply regarding your credit analysis within two days and shortly thereafter the amount is already made available to you.

BizCapital specializes in this type of loan and has as its focus the bureaucratization of this practice to facilitate the life of micro and small entrepreneurs and boost new business.



The Meaning of Interest Rates for Today’s Market Economy


If you are a person who is interested in the financial and monetary market, the following information about the meaning of interest rates on the market economy is the key to bringing you to success quickly and effectively. Best.

The meaning of interest rates for the market economy

To send you the meaning of interest rates for the latest market economy, TheBank ‘s staff has spent a lot of time and effort, learning, synthesizing and refining from valuable documents. . This is also considered as a manual, which helps customers have a more specific and accurate view of interest rates.

Interest rates are a tool to encourage savings and investment

Interest rates are a tool to encourage savings and investment

Saving is the remaining income after consumption. The meaning of interest rates on a market economy is like a tool to encourage savings and investment. Because it regulates consumption and saves in a stable way, it does not cause much difference. When high interest rates will cause you to sacrifice current levels to save, use for other more important items in the future and vice versa. Currently, savings are attracted and encouraged much to create a stable loan fund, helping meet the needs of a sustainable market economy.


Interest rates are tools to regulate the macro economy

Interest rates are tools to regulate the macro economy

From a further perspective, the meaning of interest rates on the market economy is a tool to regulate the macro economy. When interest rates rise, the chances of you getting bigger income to offset the interest payable leads to a decrease in investment. The aggregate demand also includes components such as consumer demand of individuals, households and businesses’ investment needs that will also change. The volatile interest rate certainly affects investment, which is obvious. In addition, interest rates also affect consumption and indirectly affect the objectives of the macro economy.

See also: The meaning of real interest rates and the basics you should know

Interest is a tool to distribute capital and stimulate efficient use of capital


The closer we study, the more we see the meaning of interest rates on the market economy as a useful tool to distribute capital and stimulate efficient use of capital. For projects of equal risk, any project with a higher interest rate will be able to absorb capital more quickly and more. Thus, with the creation of different interest rates will generate and allocate different capital flows in accordance with the purpose. In terms of loan relationship, the borrower will pay both principal and interest when due. The main requirement is to pay interest, so borrowers will be aware of how to use the most effective capital. This leads to production and business actions to generate income, profit, offset costs, create a basis for interest payment.


Interest is a measure of the state of the economy


Referring to the meaning of interest rates on the current market economy, it is undeniable that this is an important tool dedicated to measurement purposes. In fact, this is very clear. As the economy grows, most interest rates tend to increase due to increasing supply and demand of loans. At that time, the growth rate of loan funds was always greater than the growth rate of loan supply. And vice versa, when the economy recovers, we can easily see that interest rates will tend to decrease.

Interest rate is a tool to implement the national monetary policy

Interest rate is a tool to implement the national monetary policy

Talking about the function of national monetary regulation is about the meaning of interest rates on the market economy today. By interest rates are able to regulate the macro economy very effectively.

As the economy, financial market has not developed, interest rates are considered as tools to influence intermediate goals and thereby to the ultimate goal, the highest monetary policy. The State Bank has done this through forms of fixing business interest rates for banks or specifying deposit interest rate frameworks – loan interest rates or loan interest rates. From the above forms, the state bank can easily control the lending interest rates of banks in the direction of easing or tightening monetary.

Hopefully, the above sharing will help you better understand the meaning of interest rates for the current market economy . If you find this article useful, don’t forget to share it for everyone to know.


Discover 6 Most Common Mistakes in Financial Management



Brazil is one of the most entrepreneurial countries in the world, but few companies survive the second year of life. The main villain are the mistakes in financial management.

It is common to find people extremely capable in their area of ​​action, with innovative ideas and full of desire to grow and impact society. However, the lack of knowledge and practice with the company’s finances is crucial and causes the enterprise to fail.

Financial management is of extreme importance for any type of business, regardless of its field of activity. It is responsible for allowing the entrepreneur to control cash flow, ensure payment of expenses, identify superfluous expenses, reduce costs and even make new investments.

In other words, the entrepreneur will know exactly what should be done with the money that is in the company’s account. Are you interested? So, continue reading this article and discover 6 most common mistakes in financial management. Do not miss this opportunity.

>> Loans without bureaucracy for your company? Request a free proposal with BizCapital by clicking here!

The 6 most common mistakes in financial management:

The 6 most common mistakes in financial management:


1. Do not control cash flow

1. Do not control cash flow

Cash flow is a way to track all the financial movement carried out in a predefined time frame. All incoming and outgoing money must be considered, with no exception (even those “insignificant” expenditures should be noted).

It can be said that not controlling cash flow is one of the main mistakes in financial management. Not knowing the amount of money that comes in and leaves your company is indicative that the situation is not very favorable.

It is worth noting that a well-structured cash flow represents far more than paying bills on time and keeping the company out of the red . It can help the entrepreneur plan for the future by planning investments and providing ways to ensure the survival of your business. Think about it!

2. Mix personal and business accounts

2. Mix personal and business accounts

Mixing personal and business accounts is another of the mistakes in financial management that can hurt your company. Unfortunately, it is common to find entrepreneurs paying their residence bills with company resources or making purchases for company on their personal credit card.

Apparently, this kind of situation does not seem to be a big problem, but it is. Not separating the accounts causes the manager to lose control of the amount that is the responsibility of the company and the amount that is the personal responsibility. In addition, planning the company’s future becomes impossible.

The best way to avoid this kind of problem is to set a value as pro-labor, working as a wage, and obviously including it in the cash flow. So every month you will receive the same amount of money, which should be used to clear your accounts.

3. Do not plan


As highlighted in previous topics, financial planning and programming for the future of the company is critical to the survival of any type of business.

We can even say that financial planning is what will make your business thrive and achieve its goals. So you need to identify where you want to go and what needs to be done to reach that threshold.

Set a budget for each industry sector. Make semi-annual or annual projections, adjusting them whenever necessary. Remember, “If you do not know where you want to go, any way is good.”

4. Do not control stock

4. Do not control stock

The stock of the company must be seen as a great investment that has already been realized and that needs to generate profits. So controlling it is critical. Imagine, for example, that you have two types of products: one that pleases the public and has high sales and another that is not so bought.

From this principle, your stock must have a larger quantity of the first product than the second. If you always buy equal amounts, it’s okay to say that you’ll have a lot of capital stuck in your inventory, generating unnecessary costs (such as storage) and taking too long to turn into profit.

In other words, you could have invested less in this type of product and more in the other, selling more and increasing your percentage of profitability. In addition, good inventory control is able to find good suppliers and show the importance of each item sold in your business, becoming an interesting way to make sure it is worth continuing to invest in that particular item or not.

5. Not knowing how to calculate the selling price

5. Not knowing how to calculate the selling price

Not knowing how to calculate the selling price is perhaps one of the main mistakes in financial management. In order to correctly calculate the price for which your goods or services will be sold, you must have the necessary expenses for production.

Costs with raw material, labor, fixed costs of the company, displacement of professionals, machinery needed and so many others must be present in the formation of the sale price. You can not forget the profit margin, can you?

Even the maximum discount you can apply to each item should be thought out, preventing the company from taking big losses or losing sales by not knowing how much can be decreased from the final price while maintaining certain profitability.

6. Failure to manage profit

6. Failure to manage profit

Last but not least, we highlight the inability to manage the profit made. Consider, for example, that in a given month you sold a lot more than usual. So what to do with that “extra money”?

Many entrepreneurs do not know what to do and end up spending this money in a way that can undermine the progress of the company’s activities. The ideal is to reinvest some of the profit in the company itself, seeking to automate processes , optimize sales, improve marketing and many other actions aiming always better results.

We have listed, throughout this article, some of the key mistakes in financial management of a business. It is of great value to be able to identify them as soon as possible, taking time to provide solutions and avoid the early closure of activities. Do not waste time, change the financial management of your business, achieve your goals and watch your business grow more and more!

So, did you like our article? What do you think about the mistakes in financial management that we highlight? They’re pretty common, are not they? So, share this article on your social networks and help other entrepreneurs like you!


Make Your Mortgage Lighter | Payday Loans


Given that mortgages last a long time … very long … it is likely that a mortgage is no longer as convenient as at the time it was subscribed or your financial situation deteriorated. In these cases the Renegotiation of the loan can help . With this solution it is possible to request the credit institution that has granted the loan to modify some of the conditions provided by the contract.

What can be changed with the Renegotiation of the Mortgage?

What can be changed with the Renegotiation of the Mortgage?


Thanks to the renegotiation of the loan, it will be possible to review:

– the amount of the installment : you can request to lower the amount by extending the duration of the contract;

-the elimination of periodic administrative expenses : the annual management costs of the contract or for the collection of the installment;

– the type of interest rates : moving from fixed to variable and vice versa;

the reduction of the mortgage spread .

Request the Renegotiation of the Mortgage

How to renegotiate the loan?

How to renegotiate the loan?


It will be possible to proceed with the renegotiation of the loan by private agreement . The holder of the loan therefore signs a new agreement with the credit institution that has disbursed the loan. The procedure to request it is quite simple. Just send a registered letter to the bank specifying the conditions on which you want to negotiate again.


What are the advantages of renegotiating the loan?


This procedure will allow the borrower to get a new plan suited to their needs. In fact the advantages it offers are:

– the previous loan is not extinguished, so there will be a saving in expenses and notary fees;

– the borrower does not lose the tax benefits provided by the original loan agreement;

– the renegotiation of the loan does not include any administrative cost, nor bank fees, nor the application of taxes and fees charged to the customer.

The Heathcliff team professionals will be at your side to guide you so that you can get the best financing according to your needs.


Fast Paced Companies with Business Ideas.

In recent years, credit activity in Bulgaria has been developing in a positive direction. Compared to past years, the level of good (repaid) loans has risen and fast loans have seen unprecedented growth. According to financial sources, non-performing loans have been reducing for three consecutive years. This, on the one hand, means that the economic situation of the Bulgarians is stabilizing. On the other hand, confidence in most fast-paced credit companies and credit companies is rising.

According to the Chairman of the Commission for Consumer Protection (CPC) – Dimitar Margaritov – in the beginning of 2018 there are 50 registered companies for fast loans in Bulgaria. This figure is 100 less than the information that was given in the summer of 2017 by the BNB. Another question is whether the number of companies performing this activity is higher than the aforementioned. Each user can investigate whether the business they are working with is registered. This can significantly reduce the risk of abuse and the possibility of hidden clauses in contracts.

Rise of the financial sector in Bulgaria

 Rise of the financial sector in Bulgaria

According to the CPC, most fast-paced companies adhere to the conditions set by the Commission. This is good news in view of the lack of trust in many of the institutions, which has been observed in our country since the advent of democracy. This year the Bulgarian financial sector expects to further increase its assets. Interest rates on loans are also expected to increase. Banks are very healthy after the 2014 CCB crisis, and the emergence of such a precedent is not so strong.

Even Gross Domestic Product (GDP) and money supply have grown in the past year – something our native economy has long been dreaming about. This may be due to the fact that interest rates have fallen well below their real value, and very often banks lend businesses with 2% interest.

Can you sign a home loan agreement?


Speaking of fast-paced companies, we can say that they are not as oriented to the corporate sector as to individuals. Last year, these companies served the Bulgarian households with the amount of BGN 2.157 billion, which is slightly more than 80% of their users. The rest of them are businesses and businesses.

Drawing an online credit is a common practice in today’s reality. As you can pay your bills and buy goods from the Far East online, you can also download a loan online. Almost all large and not so well-known credit and fast credit companies have well-organized websites on the Internet. Here, in a very convenient and visual way, they present the parameters that the consumer prefers. The details of the contract can be specified on the mobile phone, then the online form is completed and the application is completed.

When something unclear arises, you can contact the creditor representatives for clarification. The company should give you the most detailed explanation of the credit you would be interested in. The websites of various fast-tracking companies and credit companies also offer promotional offers for an interest-free loan. Before choosing this option, check what the default terms will be. In general, it is important to get detailed information on all terms of the contract.

How do the technologies affect the credit business?

 How do the technologies affect the credit business?

Credit business is very closely related to technology development and economic growth. It has not passed the non-banking lending sector, which has been too intensely involved in internet marketing. Online technologies, websites and communications have allowed businesses to reach more people and visualize their services in front of the monitor. The speed of services increases and consumers often receive the money within 15 minutes of approval. After completing an online form, your application will be reviewed by credit specialists. They may be contacted by you to identify you and make sure there is no scam. You will then be notified by phone and sms of the opinion of your request. This saves time from office to consumer and creditors.

The convenience of working with fast-paced companies is great because you can get money even after the end of bank hours or on weekends. This can happen if you apply online for a quick credit. If you are approved within the lending company’s working hours, you can get the money in a bank account and you can download them at any time from an ATM. Many of the fast-paced companies also offer more than just the EasyPay safe deposit box.

Are there people who can not get credit?


Yes, there are those who would not approve credit and credit companies. These are minors and minors up to 18 years of age for obvious reasons. For these reasons, such persons are not allowed to borrow money. Others, which often can be denied approval, are people with bad credit history. There are companies that lend to them, but the terms of the loan are not particularly beneficial to the consumer. It is advisable not to use such services as they could bring you further deterioration in your financial condition. Be careful not to accumulate a bad credit rating, because it can be a stumbling block in many ways.

What Dangers Can You Expect?


We mention this issue because of the complaints that citizens make to the CPC for cases involving fast loans. According to Dimitar Margaritov, Chairman of the CPC, these letters are only 4% of all, which indicates that the market is not so “polluted”. Despite the monitoring exercised by controllers, unscrupulous creditors often violate ethical rules for dealing with the client. Problems are particularly noticeable with companies that do not have a well-established name on the market and include in their contracts unregulated clauses with a smaller font. Other tactics are too high notification fees for overdue debts after maturity. The CPC received blank contract data sent by post to an adult user.

In view of such allegations and signals, it is good for everyone wishing, before withdrawing credit, to carefully read the contract that he signs. On the other hand, you can choose the more well-known and established companies in the market. They have already built a good name and you can rely on their loyalty. Most of the danger is with companies not registered with the BNB who have no established practice in the country.

Of course, if you miss the money back in time, you may expect an increase in your debt, which we advise you to avoid. To do this, read the revenue you expect before targeting loans from fast-paced companies. When you work with a certain company, you are aware of everything under the contract and you are loyal in the return of contributions, do not worry about credit problems.

What is the optimal withdrawal amount for fast credit companies?

 What is the optimal withdrawal amount for fast credit companies?

Most fast-paced lending companies mainly grant small amounts. It is best to withdraw amounts up to $ 1,000 or just over $ 1,000. Again, it depends on your own financial options for the month and what cash receipts you expect. For larger loans, it is better to look for a longer repayment term and this involves higher financial risk. You will not be wrong if, if possible, you give back the amount in shorter terms, but this is not always possible. This will reduce your due amount.