The early repayment of a loan depends on the conditions of the respective credit institution. If the option of free special repayment has been contractually agreed in advance, the loan can also be repaid faster than planned. Did you make a personal loan in Switzerland and would you like to repay it before the end of the term? Are there additional fees for early repayment of the loan? Occasionally it happens that a borrower has the opportunity to repay his loan in whole or in part prematurely.
Is an earlier repayment possible?
The early repayment of a loan depends on the conditions of the credit institution. If the repayment option of gratuitous special payments has been specified in advance in the contract, the loan can also be repaid sooner than intended. However, this variant is not offered by every house bank and not for every loan.
The premature repayment of debts leads to a loss of interest for the house bank and can usually even charge you a penalty for early repayment. This is justified because the banks have calculated the interest over the specified time horizon. However, if the loan amount is paid earlier, the house bank will receive less interest than was provided at the time of approval.
This interest loss can be paid by the house bank through the early repayment penalty. The remuneration for loans with a term of more than 12 months may not exceed 1.0 percentage point of the remaining loan amount. For a shorter term, a maximum of 0.5 percentage points of the remaining debt can be determined as a prepayment penalty. Even if the house bank demands a settlement, the early repayment of the debt may be worthwhile.
The special repayment or even the payment of the entire loan amount before maturity must be calculated individually. Often it pays to turn the money into a cheaper one. The loan agreement is terminated with the previous lender and a new one is added.
If the interest rate level was higher at the time of the transfer, the cost of borrowing can be reduced by a lower percentage despite the early repayment. A rescheduling makes sense if the cheaper interest-bearing loan repeals the calculated early repayment penalty. Note: Despite careful research, the accuracy and punctuality of the information can not be guaranteed.
Early repayment (repayment) of a Personal Loan: How to repay your loan before the deadline
Have you taken out a personal loan in Switzerland and want to repay it before the end of your term? Are there additional costs for repaying the loan? If a loan contract is concluded in Switzerland, it is fixed for a certain period so that the monthly installments can be calculated exactly. In most cases, the execution can not be changed.
The right to extraordinary repayment is stipulated in the Consumer Credit Law: As a borrower, you have the right to terminate the loan agreement with a notice period of three months and to repay the outstanding loan amount in good time. There are several benefits to prepaying a personal loan: you can get more cash back and save additional capital.
The reason for this is that the interest that would still be payable on repayment of the loan no longer applies. You will only be required to pay interest from the day you sign the loan agreement until the date of full repayment of the loan, even if you repay the loan before the contract expires.
Because credit institutions lose substantial interest income through the early repayment of personal loans, fees are incurred for the repayment of the loan. The fee for the early repayment of the loan is usually around USD 100, but varies from house to house. When does a special amortization make sense? Before an early loan repayment, you should ask yourself if the special repayment will even pay off.
As attractive as it may be to repay the small loan before the contractual deadline expires: If there are only a few tranches left, the costs for the unscheduled repayment over the interest savings can lie with the prepayment date. An unscheduled repayment is useful, for example, if you are looking for a cheaper loan from another financial institution and want to reschedule your debts.