Is early repayment of consumer loan possible?

When things are going well, there is sometimes more money left over than initially planned.

Many bank customers then ask the question: is an early repayment and repayment of consumer loan possible?

If you want to take out a loan, you usually do not think about repaying the loan before the end of the term. Finally, the mini loan, small loan or other degree is used, because currently urgently needed money. Only very few people can imagine having enough financial resources to announce a termination and to tackle early lending. However, in this situation, many private households wonder whether early repayment of consumer loan is even possible.

Early withdrawal of the loan is possible

Loan providers must agree to early redemption if the loan has been completed after June 11, 2010. There is no specific deadline for termination. However, it is possible that the banks would like to have a so-called prepayment penalty from the borrower. It is also interesting that the maximum of this amount depends on the remaining term. Banks can not recoup more than 1% of the value of the repayment if, for example, the mini-loan had lasted more than 12 months. With a shorter residual maturity, the maximum is 0.5%. And: The prepayment penalty may not be higher than the value of the remaining interest anyway. Old contracts are still bound by notice periods.

The benefits of early eradication

Anyone who thinks about realizing a repayment before the end of their term should also know exactly what benefits this can actually bring. Small loans and Co. as well as their repayment installments or loan installments are always dependent on the agreed interest rate and the resulting interest. If you repay your loan early, you will of course save the remaining installments. And since the early repayment penalty must never be higher than the remaining loan installments of the term, early repayment does not mean a financial loss.

What makes a good loan?

A great loan is not always characterized by a low interest rate, thus small interest rates and repayments. Of course, from the point of view of the borrower, the compensation payable to many banks in the event of early redemption should, of course, be as low as possible. It can make sense to pay attention to this already in the search. By the way, many private households are considering terminating the contract because they want to reschedule their debts. Rates of other contracts can be paid with a new consumer loan. The current account is relieved by this debt restructuring. But only in passing, because: A premature loan transfer is possible.