Earlier repayment of the loan for any purpose will certainly increase your credit standing and apply for a loan for a specific purpose with a much higher amount. This is not only an opportunity to increase your financial credibility but above all to reduce your monthly costs. Repayment of several debts at the same time may be too demanding, especially considering the long loan period.
How do you pay off your cash loan ahead of schedule?
By law, the borrower may take advantage of early repayment, provided that it is a consumer loan. This is a great help for people who use commitments for any purpose and want to be sure that the services they use have very flexible conditions.
Do you have additional funds that you can use to pay off your debt? You have at least two options to repay the liability before the contractual deadline. When repaying a loan, you can make an overpayment by transferring a higher installment than the set amount. It’s an easy way to reduce the capital you have to return to the bank at a low cost, but systematically. Debt repayment time will be shortened, and the borrower can even significantly reduce the cost associated with accrued interest.
The borrower can also repay the loan once, although of course, it will not be too easy in the case of high debt. However, nothing prevents you from settling such an obligation in advance, although often the bank requires the signing of an annex that will allow you to accurately determine the terms of such repayment. If the loan is repaid in this way, it may be necessary to pay an additional commission, which will be charged for changing the applicable loan terms. It is worth getting acquainted with the cost of such an offer in advance and considering whether early repayment of the debt will actually prove attractive.
Remember, before you pay to the bank an amount that will help you settle your debt, please report it directly to the bank. You can consult your situation with an employee of the institution and find out everything about the potential costs that can accompany quick loan repayment. A bank consultant will be able to help you fill out the relevant documents if they are necessary before paying off the cash loan.
The cost of early repayment?
Do you think that the bank may discourage you from settling your debt earlier due to the costs involved?
This means that it is worth delving into a cash loan agreement, even before it is concluded between the parties, especially if the borrower can earlier assume that he will have a chance to repay the incurred debt faster.
The provisions setting out the fees that institutions may charge in the event of early repayment are clear:
If the loan is repaid earlier than a year before the scheduled time, the bank may charge a commission of up to 1.00% of the loan amount to be repaid.
If the loan is settled less than 12 months from the date of the last installment of the loan, the commission maybe only 0.50% of the value of the debt repaid.
The bank has no right to charge interest higher than the anticipated loss of the bank in the event of early repayment.
The commission may not exceed the value of interest that the borrower would repay when deciding to repay the loan in accordance with the contract’s schedule.
As you can see, the cost associated with the quick repayment of cash loans is not so high. As a customer, you can think about this solution without worrying about too high costs.
Find the right loan offer
Being aware of the fact that your financial situation may improve significantly, thanks to which you will be able to pay off the debt you have incurred earlier, it is worth ensuring the right choice of cash loan. Already at the stage of looking for a loan, pay attention to the liabilities, which clearly offer the bank’s customers faster repayment of the liability without additional fees.
You will find more and more services on the financial market that also try to make your offer more attractive to potential customers. Repayment of the loan ahead of schedule, if the contract does not provide for any additional fees, is very attractive, the borrower can then reduce the cost of his entire commitment, significantly reducing the interest charged by the institution.
Choose a cash loan using the tools on our website. The ranking of cash loans is a simple and effective tool thanks to which you can quickly choose a service that will suit you not only in terms of the maximum available loan amount or repayment date but also the total cost or other conditions that may make the service more attractive to you on other debts.
If you want to compare several popular offers, you can also check the loan calculator, which will help you quickly find out which offer has a competitive APRC.
Early loan repayment – summary
If you want to use the option of early repayment, you can do it in several stages, by regularly paying a higher amount to the institution’s account. For many people, early repayment is primarily related to a one-time repayment of the loan, even several months before the set date. Each of these variants is possible thanks to the law, which in this case protects consumer rights.
Faster repayment of a cash loan does not have to involve huge additional costs, but you have to be aware of the fact that the bank may demand a commission that will compensate for the financial losses that the institution will incur if the loan is settled earlier. However, these are not amounts that could discourage people who have the opportunity to pay off their debts, and may even need to be able to use other services without compromising their creditworthiness.