If you have previously borrowed a payday loan, it is worth paying back before the loan expires, as it can save you thousands. If you have some money at home, you may want to spend on a payday loan repayment rather than investing in a savings. Even if you did not have enough to pay off your entire debt, it is worth paying off some of it. Whether you repay the loan in full or pay part of it, you pay substantially less interest to the credit institution. It’s a good idea to check with your bank about the prepayment rules and fees when you take out a payday loan.
Payday loan Final Repayment – What Does Your Fee Depend On?
A financial institution charges a fee for early repayment and early repayment, but it is worth it because it comes out financially better than the whole administration. The prepayment fee depends on the amount prepaid, the remaining maturity, and the amount of the prepayment in the past. The fee is limited by law. The full prepayment of a loan is commonly known as a final repayment. In this case, the financial institution may charge a prepayment fee, but the loan agreement will also be terminated.
Payday loan Term Repayment – Fees
- The prepayment fee for a payday loan can be up to 1% if you have more than one year remaining to maturity.
- If less than one year is left to maturity, a maximum of 0.5% shall be taken into account.
- Prepayment is free if you pay up to 200,000 forints and have not used the prepayment within the previous 12 months. This is worth doing because it will reduce your monthly repayment and save the amount you have saved so that you can repay the payday loan sooner.
If you repay your loan sooner, you are free to pay the amount you would otherwise have to pay off. If you do not need the money freed up in this way, it can be a wise decision to save it for difficult times. However, if you have a specific goal, you may want to choose the one that suits you best, so you can realize your plans faster.
Payday loan Final Repayment – Why Pay a Fee?
If the debtor repays a part or all of his loan debt in a lump sum, the credit institution forfeits future interest income. That’s why financial institutions charge fees for early or early repayments. In the case of early repayment, the source from which the debt is financed also matters. This can be a self-financing loan or a payday loan. You can save a lot of money with a mortgage loan. Current loans may have a much better interest rate than your existing loan, meaning you can pay off your loan. During a loan redemption, you can cancel your old, more expensive loan with a new loan and terminate your previous contract. From then on, you will have to pay off the new loan with a more favorable repayment. Some financial institutions, on the other hand, may have different rates for settling their outstanding debt from a different financial institution rather than from own funds.
Payday loan Final Repayment – How are Fees Calculated?
The banks calculate the prepayment fee on the basis of the prepayment amount. Prepayment Fees Due: They are always payable on prepayment occasions, there are several times when a prepayment is partial, so you have to pay as many times as you prepay. As a general rule, the prepayment fee does not exceed the amount of the loan interest payable for the period between the date of the prepayment and the original maturity date of the loan, so in fact the prepayment fee compensates the banks for the loss of interest.