Whatever the progress of the repayment of your loan, you can pay it off early and at any time. But how to do it? Follow the guide. An additional cash inflow? A salary increase?
There are many reasons that can help you settle your credit in advance. The steps to achieve this may seem complex, so here are some clarifications that may help you.
What are the rules for prepaying a loan?
It is always possible to prepay a loan in full at any time. If you wish to reimburse only part of the amount, this is also possible. Generally, you must make your request by registered mail to the attention of the lender.
How much does the prepayment of a loan cost?
Repaying a loan before the balance is over may result in compensation, more commonly known as re-use fees, which you will have to pay.
The law is different if your contract was concluded before or after 2010.
For a contract concluded before 2010, it is the amount borrowed which will determine your indemnity to be paid. If the contract is less than $ 7,500, the compensation may not exceed two months of the total cost of the credit. If it is greater than or equal to $ 7,500, it will increase to three months maximum.
For a contract concluded after 2010, it is the period between the early repayment and the date of termination of the contract which will determine the compensation to be paid. With a delay of more than 1 year, the compensation may not exceed 1% of the amount reimbursed in the capital. If the period is less than 1 year, it will then amount to a maximum of 0.5%.
This applies if you prepay all of your credit. When you only reimburse a part, the re-employment allowance is calculated on the capital you pay.
What documents should I get?
In order for you to repay your loan, the credit agency must provide you with the amount of the re-use fee. Depending on your choice to fully or partially settle this loan, the lender will provide you with a new amortization schedule and the precise duration of the repayment. You will be informed of the new monthly payment due, as well as the evolution of the remaining balance.
In the event of total repayment of your credit, you can ask the lending organization for the closing document of your credit, which allows you to obtain written proof. The lending organization communicates the closing information to the Central Credits to Individuals within two working days of the total repayment of your credit.
What are the real advantages of paying off a loan early?
During a full refund, you will no longer have to pay interest on future monthly payments, since these will no longer be necessary.
If it is a partial refund, you have several options. You can either ask to pay the same monthly payment and the duration of the credit will be reduced, or pay a reduced monthly payment for a duration equivalent to the initial credit request. This is how you will get a new depreciation schedule.
Can I lose my tax benefits?
It is important to remember that by repaying your loan early, you will lose the tax benefits that may be linked to it. We, therefore, advise you to inform yourself well before making your decision.
Conclusion: in order to make an early repayment of your credit, your credit organization will be able to support you in all serenity in this approach. Do not hesitate to contact him to ask any questions.