Dutch Interest

What is Dutch Interest?

Dutch Interest, also known as Full Boat interest, is when a private lender charges interest on the full loan amount, including the construction holdback that has not yet been disbursed to the borrower.

For example, let's say you have a $100,000 construction loan from a private lender at 10% interest. The lender uses a draw request process to reimburse you based on progress completing your scope of work. You may not have received any of your construction loan holdback but you are still paying interest monthly on the full $100,000 portion of your loan. That's $833.33 per month for funds you have not even accessed yet.

Do all private lenders charge Dutch Interest?

When evaluating private lenders, it's important to confirm whether they charge dutch interest or "non-dutch" or "as disbursed" interest. You can save a lot of money by avoiding dutch interest.

Unlike most private lenders, OfferMarket charges interest on an as disbursed basis -- you are only charged for the portion of your construction loan that is actually funded to you. We believe this is the most fair arrangement and aligned with our mission.

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