What Happens at Loan Maturity in Costa Rica? A Private Lender’s Options

For a private lender, loan maturity is not just a date on a calendar. It is the point when the signed loan documents call for the principal to be repaid and the lender decides what, if anything, comes next.

That decision should be based on the actual file at that time: payment history, the borrower’s situation, the property, the security, and whether the original repayment plan was carried out properly. A lender is never required to continue with a borrower or move into another loan.

What lenders should understand from the start

Private property-backed loans arranged through GAP are normally discussed around 12% annually and can be higher depending on the individual loan. The rate is not a promise or a fixed site-wide offer. It depends on the collateral, location, loan-to-value, term, borrower, repayment plan, and the full file.

Terms generally range from six months to three years. Shorter terms make the maturity date and repayment plan especially important before a lender decides to participate.

Principal is scheduled for repayment at maturity under the signed loan documents. A lender should understand the expected source of repayment before funds move—not simply assume a sale, refinance, or future project will occur.

Three possible outcomes at maturity

1. Scheduled repayment

The intended outcome is that the borrower follows the signed terms and repays the principal at maturity. The closing attorney or notary and the applicable documents guide the closing and registration steps. This is why a clear repayment and exit plan matters at the beginning of the loan.

2. Continuing with the same borrower

If the lender is satisfied, the borrower has performed properly, and the full file still makes sense, the lender may choose to continue with the same borrower. That is a new decision, not an automatic renewal. The property, title, liens, value, loan structure, and repayment plan should be reviewed again before any new term is agreed.

3. Considering another opportunity

If the lender does not wish to continue with the same borrower, GAP can present another property-backed opportunity for the lender to consider. There is no obligation to accept it, and no promise that a particular opportunity will be available. Each lender decides whether the next file fits their own criteria.

Why the security and closing structure matter

GAP uses first-position mortgage security only. Before a loan is funded, the file can be reviewed for title, ownership, existing liens, road access, location, condition, marketability, realistic value and comparable support, loan amount, purpose, and the repayment and exit plan.

Borrowers normally pay legal fees and closing costs as part of the closing structure. If an existing mortgage or lien must be paid off to create a proper first-position structure, that payoff can be addressed at closing when the complete file supports it. The exact structure must be reviewed case by case before funds move.

A strong property-backed situation may sometimes support around 50% loan-to-value, depending on the full file. Lower loan-to-value requests, often around 30% to 40%, can be easier to structure when both the property and the file are strong. These figures are guidance, not guarantees.

What to review before choosing a continuation

• Was the borrower current and compliant with the signed loan documents?
• Is the property still practical collateral today?
• Have title, ownership, liens, access, condition, and marketability changed?
• Does the repayment plan remain credible for the proposed new term?
• Would the lender rather receive scheduled repayment and consider another file?

For homes, completed and marketable properties can be more workable collateral because they may be usable or rentable if a lender must take them back. Recorded rights of way, easements, utility rights, and neighboring-use issues are not automatically negative, but they must be understood because they can affect access, use, and resale.

The practical point for lenders

Loan maturity should be predictable because the original loan was structured with a credible repayment and exit plan—not because repayment, renewal, or a new opportunity is guaranteed.

GAP looks at whether the property is practical collateral today and whether the requested financing has a credible repayment and exit plan. That same discipline should guide a lender’s decision at maturity.

If you would like to discuss a potential Costa Rica private lending opportunity, contact GAP to review whether the file may fit your criteria.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)