Procedure for early loan repayment. Features of early loan repayment
In the article we will tell you what a borrower should pay attention to if he is interested in early repayment of a loan from Sberbank or any other bank in the country.
Early repayment methods
Full early repayment of the loan involves paying the amount required to close the loan agreement. The entire principal debt is returned and interest is paid for the period of actual use of the loan funds.
With partial early repayment, the client pays an amount that exceeds the monthly payment, but does not completely cover the debt. The debt is reduced and interest is recalculated. Depending on the bank, this type of repayment allows you to reduce the monthly payment date or shorten the loan term. Some organizations give the borrower a choice between these two options.
In what cases is this beneficial?
It is advisable to repay loans ahead of schedule in the first half of the loan term, especially if we are talking about an annuity payment schedule.
When the loan is repaid in equal installments, the repayment scheme is structured so that in the first months the payments consist mainly of interest. Roughly speaking, in a payment of 10 thousand rubles in the first month, interest will be 8 thousand rubles, and the so-called body of the loan will be 2 thousand rubles. In the last month it will be the other way around.
Therefore, by paying in full in the first half of the term, you will actually save on interest - you simply will not have to pay it. In the second half of the term, early repayment is no longer so profitable, since you have already paid the lion's share of the interest and are actually returning only the body of the loan.
If your free money usually works (you invest it in business, real estate, shares), then in the long term it is unprofitable to divert funds for early repayment.
Is it paid?
Since November 2011, the borrower’s right to repay the loan early has been legally enshrined, and the law has retroactive effect. Even large banks, be it Russian Standard, Sberbank or VTB, cannot prohibit early repayment of a loan. This applies to all types of lending.
The bank has no right to charge fines or fees for early repayment. If this happens, go to court.
How does the early repayment procedure work?
It is better to get the answer to this question directly from the creditor bank. For example, early repayment of a loan at Sberbank is made upon application, which should indicate the date (necessarily a working day) of early repayment and the amount.
It’s easier at Leto-Bank: you need to call the hotline or contact the bank office at least a day before making the next payment to clarify the amount for early repayment. If the deposited funds are less than necessary to close the debt, then partial early repayment of the loan will be made.
There are two fundamental points here. Firstly, if full early repayment of the loan is carried out, then you need to know the exact repayment amount down to the penny. Secondly, the bank must be warned about the intention to pay ahead of schedule, otherwise it will simply not write off funds in excess of the monthly payment amount.
Once again about the application for repayment
Many borrowers are annoyed by the need to once again visit a bank branch to write an application for early repayment of a loan. Let's see what the Law on Consumer Credit says about this.
If the loan is not intended, then without notifying the lender you can return the entire amount within fourteen days from the date the loan was issued. If this is a targeted loan, then within thirty days. In both cases, the borrower is required to pay interest for the days during which the funds were in his possession, even if he never used the money.
If the above deadlines have passed, then the debtor is obliged to notify the bank of his intention to pay ahead of schedule at least thirty calendar days in advance, unless a shorter period is specified in the agreement.
If partial early repayment of the loan is made, the bank has the right to establish a requirement that partial payment of the debt occurs only on the day the next payment is transferred.
How to find out the amount due
You will need a repayment schedule so you know the principal amount owed. To it you need to add the amount of accrued interest, which is calculated using the following formula. The loan rate is divided by the number of days in a year. The result is multiplied by the number of days that have passed since the date of the last payment, and by the amount of debt after the date of the next payment. The interest rate is indicated in decimal form, that is, 20% would look like 0.2.
Let's say you took out a loan on January 1 for 1 year in the amount of 100 thousand rubles at 20%. Monthly payments are due on the 1st of each month, but on March 10 you decided to repay the loan early. The balance of the principal debt is 75 thousand rubles.
We calculate the interest: 0.2/365*9*75000=369.9 rubles. In total, you need to pay 75369.9 rubles.
Remember that interest is accrued exactly until the date before which you actually used the loan money. If you make an early payment on the 5th, the bank does not have the right to charge interest for the full month. And an even more flagrant violation would be charging interest for the full loan term specified in the agreement, despite early payment.
Advantages of early repayment
The amount of overpayment is significantly reduced, especially if the mortgage loan is repaid early. You pay interest only for the actual term of using the loan. Accordingly, if you return it before the due date, you save on interest.
If only part of the amount is paid early, this reduces the loan term or the amount of monthly payments.
Finally, when the need to pay a certain amount monthly hangs for a long time, it is psychologically stressful. The moral satisfaction from early settlements cannot be underestimated.
Disadvantages of early repayment
Early repayment of a bank loan is beneficial for the borrower, but not for the credit institution. It's okay if you pay off one or two loans early. If you do this regularly, then don’t be surprised when banks begin to refuse to issue new loans.
The longer the borrower takes to repay the loan, the more the bank earns on interest. If you constantly “impede” this income, you will become an unwanted client. The nature of repayment (late, on time, ahead of schedule, etc.) is recorded in the credit history, so it will not be possible to hide this information.
Pitfalls and possible problems
If you have repaid your loan early, be sure to verify this. Even if bank employees assure you that the agreement is closed, ask for a certificate of full repayment of the debt.
Cases when the last payment does not “reach” the bank are not uncommon. For example, you sent money through the terminal, but it got lost. It’s good if your bank sends an angry message about the delay on the day of the next payment. If you don’t send it, then you won’t find out for a long time that you’re supposedly late in payment, and all this time fines and penalties will be accrued.
Or even worse: the client made a payment through an intermediary and incorrectly calculated the total amount taking into account the transfer fee. The intermediary withheld the commission and sent the creditor bank less than necessary. Even if only ten kopecks were missing, the bank’s soulless program will decide that you were in arrears.
So ask for a certificate, it is your right. If bank employees start arguing, remind them of Article 408 of the Civil Code of the Russian Federation. If they tell you that they cannot issue a document because “the boss is on vacation,” “our bank does not issue certificates,” “the seal is lost,” “an SMS about repayment is enough,” then know that these are all excuses. Another thing is that you should not run for a certificate the next day after making the payment, since the account may not actually be closed yet. But if the bank finds reasons not to issue a certificate even after a month, then it’s time to start arguing with it.
If the bank categorically refuses to issue a certificate, send it a written request for its provision by mail or contact it in person so that a bank representative signs receipt on the second copy of the application. If after a month the bank still does not issue a certificate, complain to the Central Bank or file a lawsuit.
Insurance return
It is known that insurance when applying for a loan is voluntary and compulsory. If the loan is repaid early, the insurance may be partially compensated. If, of course, this is allowed by the insurance contract, and if the service was paid for at a time.
The part of the funds that was transferred to the insurer for the period that has not passed is returned. To do this, you must send a registered letter with notification to the insurance company, containing a statement requesting a refund of the overpayment. Attach a copy of the loan agreement and a certificate of full repayment.
If the company refuses, you can go to court. The insurer may also withhold part of the amount to cover its expenses for servicing the contract.
If the borrower has paid monthly or annual installments, then termination of the loan agreement automatically interrupts insurance payments. In this case, the money will not be returned.
Thus, we can say that early repayment of a loan is carried out approximately according to the following algorithm: find out the specifics of the early repayment procedure at your bank, clarify the amount and date of payment, deposit money and make sure that the loan agreement is closed.
In conditions of high competition between banks, less and less stringent requirements are imposed on borrowers, and almost anyone can afford to take out a loan. However, repaying the loan remains the same responsible matter, and if we are talking about repayment ahead of schedule, then additional nuances arise. In order to pay the bank ahead of schedule on the most favorable terms for yourself, you need to take into account all the nuances of early loan repayment.
Right to early repayment
What is a saving for the client becomes a loss for the bank. Previously, banks charged fees for early repayment, severely limited the amount, and even fined clients for hastily getting rid of debt.
Banks can no longer do this thanks to Law No. 284-FZ, which came into force on October 19, 2011 and amended Art. 809 of the Civil Code. From now on, the right of clients to close loan agreements ahead of schedule is secured. But the best thing is that the norm has a retroactive effect: it also applies to those who managed to take out a loan before the adoption of the amendment.
Banks are adapting to new conditions:
- initially set inflated commissions (for example, Home Credit Bank);
- establish moratoriums for several months and restrictions on amounts (for example, VTB 24);
- charge a commission for recalculating the payment schedule;
- deny further loans to borrowers who abuse early repayments (most banks).
Therefore, having a legal right is great, but you need to be able to use it correctly.
Full and partial repayment
Partial repayment
If the client contributes an amount that is significantly higher than that indicated in the schedule on a certain date, but is not sufficient to completely close the debt, then we are talking about partial repayment.
Example. The repayment date under the agreement is October 1, and you still have to pay 6,000 rubles. By August 1, you need to deposit RUB 2,000. on schedule. You can deposit RUB 4,000, ahead of schedule, but without paying off the debt in full.
Due to partial overpayment, the amount of the principal debt is reduced. In this case, the bank revises the agreement depending on the repayment scheme:
- Annuity schedule (repayment in equal payments) – the amount of further monthly payments is recalculated downwards. In this case, the payment is reduced only due to the principal debt; commission and interest are not reduced.
- Differentiated schedule (repayment in decreasing amounts) – the loan repayment period is reduced.
Full repayment
If the client deposits the amount necessary to repay the loan long before the agreed date, then we are talking about full early repayment. In this case, the client saves significantly on interest, fees and becomes debt-free. This is possible with both annuity and differentiated repayment. To close the debt completely, you need to calculate the required amount and notify the bank of your intention 30 days in advance, and then deposit the money into the repayment account.
When full repayment occurs, two scenarios are possible:
- The bank writes off the entire amount of debt from the account and closes the agreement unilaterally. But the client must still go to the branch and get a certificate of no debt in order to protect himself from possible claims.
- Having repaid the debt, the client must write a statement and take it to a bank employee so that he can close the agreement manually.
You can find out what scenario is in effect in a particular bank from the loan agreement, from a branch employee or by calling the hotline.
Early repayment rules
Full repayment ahead of schedule is a procedure that requires attention. All details must be clarified with the bank to avoid misunderstandings.
To successfully repay, you should adhere to the following plan:
- Warning. You must notify the bank 30 days in advance. For some banks this period may be shorter. You need to find out from the bank or find this information in the contract about when and in what form to fill out an application for early closure of the contract.
- Clarification of the amount. The debt must be repaid in full. If you deposit at least 1 kopeck less, the contract will not be closed.
- Payment of debt. In most cases, the early repayment date will be considered the nearest date of the next payment. The bank has the right to collect all interest and commissions assigned for payment before this day.
- Control. Make sure the bank has written off the debt in full. Take a certificate confirming the absence of debt under a closed agreement. If we are talking about partial early repayment, then in most cases you can simply deposit more than the required amount. However, you should find out the conditions of a particular bank and adhere to them, and also check the statements after each repayment.
Why should you not abuse early repayments?
If a client too often repays a debt ahead of schedule, sooner or later he will be denied another loan. This is especially true for clients who repay loans 2-3 times faster than required under the agreement.
There is a “grey list” in which banks include clients who do not allow them to earn the desired amount, and in the future this may cause a refusal in any bank. Banks are not required to inform clients about the reasons for refusal, which is why this tool is actively used.
Early closure of a loan agreement is the right of any borrower. But in order to use it with maximum benefit, you need to take into account many nuances so as not to harm yourself. In addition, you should not get carried away with early repayments, so as not to deprive yourself of the opportunity to take out loans in the future.
You can use a credit card to repay
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Video
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Just a few years ago, domestic banks strongly discouraged early repayment of loans of any type, and the most zealous of them even issued fines to borrowers for such “indecent” behavior. After government intervention, the legislative situation changed in favor of bank clients, but experts still recommend familiarizing yourself with some of the nuances of early repayment.
Early repayment
Early repayment of an issued loan is beneficial to the bank client due to the opportunity to reduce servicing costs. As a rule, the conditions for early repayment, both in full and in part, are necessarily formulated by the provisions of the loan agreement. In accordance with the amendments to Art. 809 and art. 810 of the Civil Code of the Russian Federation, since the beginning of November 2011, every citizen of the Russian Federation has the right to repay loans ahead of schedule. It is not at all necessary to obtain the consent of the banking institution. The possibility of early repayment is provided both in full and in part.
Early loan repayment
The only condition for early repayment is to notify the financial institution of your intention at least 30 days before the transfer of funds. In this case, the bank has the right to establish a shorter notice period in the agreement, and the borrower is obliged to pay the interest part only for the actual period of using the loan.
If the loan was issued before the relevant amendments came into force, early repayment without sanctions from the bank is also permitted. If the bank has recorded the fact of early repayment of the loan, it is obliged to issue the client a new payment schedule. To avoid problems and misunderstandings with the banking structure in the future, after repaying the loan, it is recommended to require a corresponding document that states the closure of the loan agreement.
Early repayment of mortgage
Sberbank of Russia benefits not only from the opportunity to obtain a loan on terms of repayment in differentiated payments. The bank also meets its clients halfway regarding the issue of early loan repayment, therefore it does not try to impose any restrictions on borrowers, as well as commissions, fines or other sanctions. A prerequisite for obtaining a loan is official confirmation of income. If the amount of the monthly salary in the official certificate is impressive, the interest rate will most likely be less. The possibility of early repayment of a loan, especially when the bank does not oppose it, is an important criterion in the process of choosing a lender for most potential borrowers.
Partial early repayment
Based on amendments made in 2011 to the Civil Code of the Russian Federation, modern borrowers can practice partial early repayment of the loan, thereby significantly reducing the loan term and overpayment in the form of interest. The main goal that can be achieved through partial or full early repayment of the loan is a significant reduction in the burden on the family budget.
Borrowers who find it difficult to repay a loan in the event of early repayment of debt receive not only financial relief, but also the opportunity to take a breath in psychologically comfortable conditions.
Calculate early repayment
To calculate an approximate schedule of loan payments after partial early repayment, it is recommended to use special calculators that are posted on banking websites. Convenient tools allow you to recalculate the upcoming repayment schedule online, taking into account additional payments received. Although more detailed calculations are only possible when working in Microsoft Excel or specialized accounting programs. If the monthly financial burden does not reach a critical level, credit experts recommend working on reducing the repayment period. This approach will not only eliminate the need to pay the entire interest portion, but will also help pay off the entire debt faster.
Refund of insurance upon early repayment
Modern legislation allows for the possibility of returning loan insurance immediately after the termination of obligations to the lender, since at this very moment the signed insurance agreement terminates automatically. To return the unused insurance amount, you must submit an application in the prescribed form addressed to the insurer's organization. As a rule, after some bureaucratic red tape, the money can still be returned minus the funds that were used to insure financial risks during the loan repayment period.
Advice from Sravni.ru: Differentiated payment is the most profitable scheme for calculating loan obligations. Early loan repayment is the most profitable tactic for interacting with lenders. This approach allows you to reduce the financial burden on the family budget, reduce the amount of overpayment, and most importantly, quickly get rid of psychological discomfort due to additional financial burden.
The main way to save on a loan is to pay it back early. But each time before making a partial early payment, the borrower will need to write a corresponding application to the bank. If you plan to deposit money in excess of the scheduled amount often, then the client will have to “run around” a lot. Then the question of saving time arises. Sravni.ru assessed which banks have the most convenient early repayment process.
The study involved 65 banks, which, according to Sravni.ru, as of March 1, 2016, issued the most loans to individuals. Information about the methods and timing of notifying the bank about partial early repayment of a mortgage, car loan and consumer loan was obtained by telephone from call center employees.
30 days is the maximum period that the bank has the right to set for notification of early repayment.
As it turned out, almost every second bank is easing the conditions for early repayment of loans, allowing its clients to fill out the necessary application by phone or via online banking, and in rare cases, by email.
The other half of credit institutions insist on visiting their branch in person, but give the opportunity to do this 1-5 days before the planned date or next payment. Among them is Sberbank, the most popular among borrowers - its clients cannot repay the loan ahead of schedule without visiting the office, but they can do it immediately, on the day of application. And only every eighth bank requires the borrower to notify him a month in advance.
5 banks that automatically write off the early amount along with the next payment
What does the law say?
The borrower has the right to advance the loan either in full or in part without penalties or commissions. All that is needed for this is to notify the bank about this 30 days in advance, while the loan agreement may stipulate a shorter period, but not a longer one.
If the borrower has just taken out a non-targeted consumer loan, then he has the right to early repay the entire loan amount without warning within the first 14 days. If a targeted loan was issued, then within 30 days the client can repay the loan ahead of schedule in full or in part without prior notification to the bank.
Partial early repayment allows you to reduce the amount of the monthly payment or shorten the loan term. Many banks allow the borrower to independently choose what is more convenient for him, but there are many who provide only one option. This is not limited by law.
Application for early loan repayment
After the bank has written off the amount of the early payment, it is obliged to provide the client with a new payment schedule.
15 banks accepting applications for partial early repayment via the Internet
| № | Bank | Method, term | Loan type |
| 1 | Through Internet banking, on weekdays, same day, you can | Mortgage, consumer loan | |
| 2 | Through Internet banking, you can do it the same day, but it’s better in advance | ||
| 3 | Mortgage, | ||
| 4 | Through Internet banking, same day you can | Car loan, consumer loan | |
| 5 | Through Internet banking, there are no time limits | Mortgage, car loan, consumer loan | |
| 6 | Via online banking, one day before any working date | Mortgage, car loan, consumer loan | |
| 7 | Via online banking, one day before debiting | Mortgage, car loan, consumer loan | |
| 8 | Via Internet banking, 3 days before the planned debit date | Car loan | |
| 9 | Via Internet banking, 5 calendar days before the payment date | Consumer loan | |
| 10 | By email, 5 working days in advance | Car loan | |
| 11 | By email, 5 days before payment | Mortgage, car loan, consumer loan | |
| 12 | Via Internet banking, no later than five days before the write-off date for a consumer loan and no later than the 25th of the current month for a car loan | Car loan, consumer loan | |
| 13 | Via Internet Banking, 10 days before the payment period | Mortgage | |
| 14 | Via Internet bank, 30 days before early payment | Car loan | |
| 15 | Through Internet banking, same day, you can, but there is a commission for recalculating the schedule - 360 rubles, free only for a month in the office | Car loan, consumer loan |
What is better: to make early payments along with regular payments or earlier?
The bank has the right to write off the amount for partial early repayment of the loan only on the day of the next scheduled payment. But not all banks are so strict - there are those who make concessions to borrowers, accepting payments on any convenient day. Why is it more profitable for a client to pay not on the next payment date?
Let's consider 6 possible scenarios for a borrower who borrowed, for example, 300 thousand rubles for 36 months at 20% per annum with a monthly annuity payment (this is more common) in the amount of 11,150 rubles. Money is deposited every month on the 15th. The cost of his loan by the end of the term should be 101.4 thousand rubles. But he decided to pay 10 thousand rubles ahead of schedule every month. 1.png)
Scenario 1. Early payments by the borrower are aimed at reducing the loan term. He makes early repayment on the mandatory payment date - the 15th. As a result, the lending period for him will be reduced to 17 months, and the overpayment will be reduced to 45.1 thousand rubles. Thus, the borrower will save 56.3 thousand rubles.
Scenario 2. Everything is the same, but early payments are aimed at reducing the monthly payment. As a result, his obligatory payments will be reduced from month to month by approximately 400 rubles, which will allow him to completely close the loan in 22 months, having overpaid the bank 52.3 thousand rubles for this. The savings will be: 49.1 thousand rubles.
Scenario 3. Early payments by the borrower, as in the first case, are aimed at reducing the loan term. But early repayment occurs five days before the date of mandatory payment - that is, the 10th. As a result, the lending period is reduced to 16 months, and the overpayment is reduced to 44.7 thousand rubles. Savings will reach 56.7 thousand rubles.
Scenario 4. Early payments are made on the 10th and are aimed at reducing mandatory payments. As a result, mandatory payments will be reduced by 400 rubles every month, which will allow the borrower to completely close the loan in 21 months, having overpaid the bank 52.8 thousand rubles. The savings will be: 48.6 thousand rubles.
Scenario 5. The borrower's early payments go towards reducing the loan term, but they are made five days after the obligatory payment, that is, on the 20th. In this case, the loan term will be reduced to 17 months, as in the first option, but the amount of the overpayment will be 45.7 thousand rubles. Savings – 55.7 thousand rubles.
Scenario 6. Early payments made on the 20th are used to reduce the amount of mandatory payments - as a result, they are reduced by 400 rubles each time. The borrower, as in the second case, closes the loan in 22 months, the cost of the loan for him will be 53 thousand rubles. Savings – 48.4 thousand rubles.
Obviously, the most profitable option for the borrower is to make early payments ahead of the required ones, using them to reduce the loan term (scenario 3).
Why is this happening? When the borrower makes early payments on the principal date, he pays the full amount of interest for the previous month. The entire amount of the partial early payment goes towards repaying the loan body.
If the early payment arrives at the bank earlier, then the money is divided into two parts - one of which goes to the interest that has accrued during this period, the second to the body of the loan. But when the mandatory payment date arrives, most of it goes to repay the principal debt, and only a small part is used as an additional payment for using the loan, since the bulk of the interest for this month has already been paid, and interest has been accrued for the remaining unpaid period on the already reduced amount of debt. 
The larger the loan and the size of early payments, the more significant the difference will be.
Today I will tell you about how it happens early loan repayment. Just 10 years ago, it was possible to repay a loan ahead of schedule without any problems or difficulties: you looked at the balance of the debt in the chart, came to the bank, deposited this amount, the bank calculated the last interest due, paid it and owed nothing more.
Now, early repayment of a loan can be fraught with many different nuances and subtleties that the borrower should know about in advance, even before receiving this loan. So, how to repay the loan early.
First of all, it must be said that in almost every case it is necessary to strive in every possible way to pay off with a bank or other credit institution as quickly as possible. The only exceptions may be some, since there you can earn more on borrowed funds than you have to pay for them, and this is profitable. In all other cases, having debt is an additional burden on your personal life, so you always need to think about how to repay the loan ahead of schedule.
Early repayment of a loan has a positive effect on the state of personal finances, so you should always strive for it. The sooner you repay the loan, the better.
That is why it is necessary to think about how to repay a loan ahead of schedule even before receiving it, and here’s why. Many banks, under certain lending programs, have begun to charge additional fees and penalties for early loan repayment.
Thus, when choosing, you must immediately pay attention to the conditions for early repayment of the loan: if the ability to repay the loan ahead of schedule is somehow limited or is punishable by fines, such conditions cannot in any way be called profitable, and it is better to refuse such a loan.
Conditions for early repayment of the loan.
What may the conditions for early repayment of a loan include? Ideally, as I already wrote, they should not limit the borrower in any way in his desire to pay the bank faster. But it is not profitable for banks that loans are repaid ahead of schedule, so they try in every possible way to prevent this. Early repayment conditions may contain the following points:
– Early repayment of the loan is permitted no earlier than after a certain period (after 3 months, after a year, after 3 years, etc.);
– Early repayment of the loan is permitted in an amount not exceeding the established amount (for example, no more than 2 times the payment per month, etc.);
– There is a commission (fine) for early repayment of a loan as a percentage of the amount exceeding the established schedule and/or fixed payment; a minimum fine may also be established (for example, 2% of the early repayment amount, or 1% + 100 rubles, or 1 %, minimum 500 rubles, etc.);
– It is generally impossible to repay the loan ahead of schedule (that is, it is possible, but for this you will have to pay all the interest and commissions established by the schedule until the end of the term).
Calculation of early loan repayment.
To calculate the early repayment of a loan, you can use your bank’s loan calculator, but you can do it yourself, however, only if you use a loan with. In this case, in order to determine the amount that needs to be paid in order to repay the loan ahead of schedule, you simply need to add up all the remaining scheduled payments of the loan body, add to this the interest for the current month before the date of planned repayment and the commission for early repayment, if she is present.
If you are repaying a loan using an annuity scheme, it is very difficult to manually calculate the early repayment of the loan, and here it is better to contact the bank with this question. By the way, you will be unpleasantly surprised when you find out that, despite the fact that you have been making annuity payments for a long time, you have practically not repaid the principal debt.
The annuity loan repayment scheme works as follows: in the first months, the annuity payment mainly includes interest, while the body of the loan is repaid very little. Thus, if you calculate how to pay off the loan early, you will see that you need to pay much more than you expected. I never recommend taking out loans with an annuity repayment scheme, including for this reason.
Partial early repayment of the loan.
If we are talking not about full, but about partial early repayment of the loan, then this can and should be done too. If you partially repay the loan ahead of schedule, this may affect the further repayment schedule in different ways, also depending on what repayment scheme is used.
If the classic scheme is used, then early repayment of the loan will help reduce subsequent payments (by reducing accrued interest) and the loan term (by reducing the principal debt). If you have a loan with an annuity scheme, then by repaying it early, in many cases you will only shorten the loan term, and subsequent annuity payments will remain unchanged (in fact, you will pay annuity payments in advance, starting from the end, from the last payment). Although, there may be other options - you need to study the terms of the contract.
Early loan repayment: return of insurance.
I would like to draw attention to one more important point, which many borrowers do not know about, because... banks don’t tell them about this, it’s not in the bank’s interests. If the terms of the loan provided for insurance of the collateral and/or the life of the borrower, then with full early repayment of the loan, the insurance can be returned. To do this, it is necessary to terminate the insurance contract with the insurance company (if such a possibility is provided for in the contract, in most cases this is possible), after which the insurer is obliged to return part of the insurance payment to you in proportion to the time remaining until the expiration of the contract.
How to repay a loan early?
Sometimes, in order to make an early repayment of a loan (especially in full), it is necessary to notify the bank several days before the operation (if such a condition is provided for in the loan agreement). In other cases, just come to the bank and repay. After the loan is fully repaid, it is necessary to ensure that the bank removes the arrest from the collateral property (if the loan was issued on collateral), since banks often forget to do this and then, when selling or other transaction with this property, the former borrower will receive an unpleasant surprise - the property under arrest.
In conclusion, I want to offer you one more useful thing: after you make full early repayment of the loan, order a certificate from the bank about the absence of debt. Of course, in most cases you will have to pay for it, but the sad experience of many borrowers shows that it is better to do this. Since situations often arise when the loan is fully repaid, and this is verbally confirmed by a bank employee, and then it turns out that some accruals continue to occur, the person, naturally, does not repay them, since he does not know about it, a penalty is charged on these accruals, the amount of debt is growing rapidly, and at one point he is simply faced with the fact that there is still a huge debt “hanging” behind him. And when you have a certificate of no debt in hand, there can be no further claims from the bank.
A certificate of no debt is your guarantee that you have made full early repayment of the loan, and the bank will no longer make any claims against you.
Perhaps these are all the main points. Now you know how to repay your loan early. I wish you to do this as soon as possible, especially if we are talking about something that does not bring anything good, but only creates a significant burden on your personal budget.
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