When we borrow money, the repayment period is usually part of the credit agreement. In the case of small non-bank loans, the loan is usually repaid in a lump sum; Sometimes, however, your financial situation may become so much that you would like to repay the loan early. How are leading Czech banking and non-banking companies doing this? Where do they allow early repayment of the loan and where do they charge for this service?
Bank loans with early repayment
In the case of banking institutions, the possibility of early repayment is not a matter of course and for some it is necessary to pay an additional fee. There are great differences between banks, and if you anticipate that you can repay the loan early, be sure to inform yourself in advance. The possibility of early repayment free of charge for current loans is currently offered by Haset bank (in addition to this you will also receive rewards for timely repayments). Conversely, for example, Csehay Bank charges a penalty fee of up to one percent of the extraordinary installment on its loans for extraordinary installments.
Non-bank loans with the possibility of early repayment
In most cases, early repayment is not a disadvantage for non-bank loans, and fines are usually not. For short-term loans (eg quick monthly loans per month), it is more or less no matter whether you pay them exactly on the due date or even a week earlier – the amount remains the same. Rather, you need to be careful not to pay the money late – in some cases there is a relatively high penalty for non-compliance. For longer-term loans that are repaid for more than half a year, a fee is sometimes charged for borrowing costs. So you better check in advance whether the borrowing company allows you to pay back for free in advance.
Extraordinary installments and change in installments
In addition to the full early repayment of the entire loan, there is also the possibility of an extraordinary installment. Thus, the borrower can pay any amount of his debt, which will reduce him and reduce the time for which the rest of the loan will be repaid. Extraordinary installments are mainly mentioned in connection with mortgage loans, where such a repayment can significantly reduce the repayment period for a client, but many banking institutions charge relatively high fees for such an installment. Some lenders also allow their clients to change their repayments. Such an example is, for example, the non-bank Home Credit, where its clients can at any time during the loan repayment reduce or increase the installment. What is important, however, is that this option must be anchored directly in the credit agreement – this is an above-standard service that Home Credit only allows when the client requests it before signing the contract.
Mortgages with the possibility of early repayment of the loan
While it is also possible for mortgage loans to pay an extraordinary installment or repay the loan prematurely, most of the fees are charged by banks for this service. In order to avoid high fees, it is necessary to arrange extraordinary installments before signing the contract, or arrange the shortest possible fixation time. In any case, the conditions are gradually changing for the better and, for example, Haset bank, which offers early repayment of the mortgage free of charge, favoring those who repay the loan as quickly as possible. In this context, it is worth mentioning the forthcoming changes in the law, which should allow people who repay mortgages to pay up to a quarter of the entire mortgage each year without sanctions.