DEFINITION of 'Paydown'

This occurs when the amount a company or government repays in debt exceeds the amount they currently borrow. A Paydown takes place when a company reissues unpaid debt for less than the initial issue. For example, if a company pays $8,000,000 in corporate bond maturities and issues $5,000,000 in new bonds then the company has $3,000,000 less in debt because it has paid down its debt.


Paydown is also when a mortgage borrower pays the principal and interest of a mortgage. In doing so, the borrower is paying down his or her debt. In general, Paydown also refers to repayment of any outstanding loan. It could mean paying down a car loan, credit card debt, school loan or any other type of debt.

  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Principal

    1. The amount borrowed or the amount still owed on a loan, separate ...
  3. Paydown Factor

    The portion of cash subtracted each month from the principal ...
  4. Corporate Bond

    A debt security issued by a corporation and sold to investors. ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Buy Here Pay Here

    Used car dealers who also handle vehicle financing for the buyer, ...
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