If you have applied for credit and have calculated that you will be able to repay it earlier, ask your questions about how to prepay the loan.
Yes, you can anticipate loan repayment.
In the banking industry we call this early settlement. It means partial or total repayment of a debt before maturity using its own resources or making a transfer of debt from another bank.
What is the benefit of anticipating loan repayment?
The great advantage is that you will receive a discount for the advance payment, according to the installment advance term, with proportional reduction of interest. All institutions authorized to operate by the Clear Savings Bank, except consortium administrators, must grant discounts for the advance payment, according to the installment advance term.
How do I anticipate payment then?
To carry out the early settlement of your loan, contact the financial institution where you took the loan. The procedure may differ for each institution.
Important Notes on Advance Payment
1. There may be fees for early settlement:
For credit and leasing operations contracted before December 10 , 2007 (date of publication of CMN Resolution 3,516, 2007 ), early settlement fees may be charged at the time the settlement is effected, provided provided for in the contract. In addition, in the case of operations contracted between 8.9.2006 and 9.12.2007, in order to charge the fee for the early settlement, the contract must contain the maximum amount, in reais, of the fee, which must have been stipulated in accordance with sole paragraph of article 2 of CMN Resolution 3,401 of 2006 , in force at the time.
For contracts signed as of December 10, 2007, charging for early settlement fees is prohibited. This means that if you hired after December 10, 2017, you can prepay the loan without paying a fee for it.
2. The financial institution must state how much you owe:
The institution that originally carried out the credit or lease transaction shall inform the customer, whenever requested, of the amount of the balance due for early settlement.
The institution must also provide the clarifications requested by the client and provide the client with a spreadsheet that enables the debt evolution to be checked simply and clearly, in accordance with the rules set out in the contract signed between the parties.
It is also the institution’s obligation to provide the client, upon formalization of the transaction, as well as upon subsequent request, with a copy of the contract signed between the parties.
In the case of contracts signed as of December 10, 2007, the present value of the payments provided for the amortization or early settlement of the transaction shall be calculated in accordance with CMN Resolution 3,516, 2007 . In the case of contracts signed as of 5.5.2014, such calculation shall be made in accordance with CMN Resolution 4,320, 2014 .
When is prepayment of loan not a good idea?
If you have free budget to advance loan repayment, this may be a good option. This is because, as we said, you reduce the fees to pay at the end of the loan.
However, if you are anticipating payment, make sure that it will not cause problems to your financial health. This is because card revolving interest rates can be much higher than personal credit interest.