It’s possible to repay a short-term loan early, but there are a few things to be aware of before you do.
It depends on the type of credit and the agreement you signed when you took the loan out, but in most cases, you can pay off the amount you’ve borrowed in less than six months without being charged anything extra to do so and in fact you may qualify for a rebate of interest.
There can be disadvantages to settling up early, such as:
• Some loans can result in a fee for repaying your loan early.
• You may have things such as loan or broker fees and you might not be able to get these back, or have them taken off your repayment total.
• Although it seems obvious, only repay your loan back early if you can afford to, so be sure to check that it won’t leave you out of pocket.
The best way to understand the situation with your lender is to give them a ring to learn what their policy is.
On the positive side, in some cases, if you repay your loan early, you’ll save money. More often than not, that’ll be because although you’re still handing back the amount you borrowed, you’re not paying the interest on the payments you would have been paying in the final weeks or months as may be entitled to an early settlement rebate.
Also, if you repay more each week than initially agreed during the term of your loan, you will be entitled to partial early settlement rebates which will reduce the remaining balance and either your weekly repayment or the length of the repayment period, depending on how the lender applies the rebate. Give the money lender a ring to understand what their repayment policy is.
There are shorter loans which have been designed to be repaid in less than six months.
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Can i pay off a short term loan in less than six months