How do you pay back your loan early without damaging your wallet? We take a housing loan for several decades, most recently for half a century.
But it happens that at some point we want to get rid of debt earlier – in full or by speeding up repayments by increasing deposits. What conditions do banks set for those who previously want to part with credit obligations?
Ways to get a mortgage
Most use a prepayment fee, but the rules they set out in the loan agreement are different. Before we sign the contract, let us carefully examine it, preferably together with a credit advisor.
There are also banks that have a contractual stipulation that the customer will pay a penalty if he overpays any amount at any time during the loan. If this is the client’s key expectation as to the bank’s offer, let’s negotiate the abolition of the penalty, so that we can overpay any amount at any time.
All banks require that if they intend to repay the loan earlier, they should inform them in advance. At Good Finance, the borrower can repay the debt one time only before the due date, but according to the agreement, he is obliged to inform the bank about this not later than 3 days before making the repayment.
Unless the contractual provisions provide otherwise, the bank will charge a commission of 1.5% for the earlier full repayment of a loan or mortgage. on the repayment amount, however, not less than USD 200.
During the term of the loan agreement
The borrower may also make repayments in an amount higher than that resulting from the loan repayment schedule. Partial, earlier repayment (overpayment) made by the borrower will be credited towards the repayment after the borrower submits a written instruction within the above deadline.
In order to repay part or all of the loan granted before the deadline specified in the loan agreement with Millennium, a written order must be submitted. The application can be downloaded from the website. In some cases, a commission must be paid for early repayment in accordance with the current mortgage price list.
The commission will not be charged for a one-time repayment of the loan in an amount not exceeding 30 percent. current debt within the first 3 years of the loan and regardless of the amount of one-off repayment after 3 years of the loan. In other cases, it will amount to 2 percent. amount repaid.
If the commission included in the price list is higher than specified in the loan agreement, the commission rate from the agreement applies. In the case of partial early repayment, the bank does not apply any restrictions on the frequency and minimum amount of early repayment. This operation does not require an annex to the contract.
Comfortable and fast
To make an earlier repayment, the client pays funds to the personal account and prepays part or all of the debt earlier through Good Finance in an automatic service or via the Internet. This form is the most convenient for the client and the least time and labor-consuming.
In this case, the earlier repayment of part of the loan changes the installments while maintaining the loan period. When the borrower completes the repayment, the loan collateral will be released within 30 days from the date of notifying MultiBank about such an operation.
Shortening the mortgage repayment time and the associated increase in monthly installments (e.g. doubling them) usually results in the need to re-examine customers’ creditworthiness and prepare an annex to the contract together with a new payment schedule.
Changing the terms of the loan agreement with Good Finance also requires the borrower to pay a fee of 0.5 percent. on the amount of current debt, not less than USD 300.