Lower Interest Rate On Loan To Save $89,244
The Town of Smithfield has renegotiated the interest rate on a 2007 loan and by doing so will save about $89,244.
The town borrowed $5 million in August 2007 to pay for the Brogden Road Power Substation and other electrical improvements. The original 20 year loan was at 4.03% interest but was reduced to 3.25% in May 2014.
Greg Siler, Finance Director, said further negotiations with the lender, Southern Bank, will allow the interest rate to drop from 3.25 to 2.89%.
The next scheduled payment on the loan is in August 2015. Siler said the lower interest rate will save the town about $7,437 each year in interest until the loan is paid off. This is in addition to the $239,000 in savings realized from the May 2014 interest rate reduction.