Month: June 2019
Do you have a personal payday loan and do you want to pay off your loan early?
Then read this blog with tips and tricks that you should pay attention to if you want to pay off your loan early.
Early repayment of personal payday loan
Have you taken out a personal payday loan for an amount lower than € 40,000? Then you have the legal right to repay your loan early. If you have taken out a personal payday loan in excess of € 40,000, the loan agreement determines whether (and to what extent) you can repay early.
If you repay early, banks will miss out on part of the interest. That is why early repayment often involves costs. Therefore, check the terms of your loan agreement in advance to avoid fines.
This is how early repayment works
With most providers you can calculate entirely online, which means early repayment for the chosen loan. You see the remaining debt, the expected new end date, an indication of your new monthly amount and possibly the interest payment.
You can then make and redeem the desired adjustments online. The repayment is usually processed within 24 hours.
Advantages of early repayment
An advantage of extra repayments on a personal payday loan is that the total credit compensation goes down. In addition, your outstanding debt with the bank is lower. If your extra repayment exceeds the monthly amount, the term of the loan will be shortened.
With a personal payday loan, the interest and duration are normally fixed, so you always know your monthly term in advance.
You can also pay extra on your revolving credit. By repaying extra you pay back your loan earlier. With a revolving credit you can repay extra credit during the entire term. Just like with a personal payday loan, the monthly costs with a revolving credit also fall when you pay off extra. An additional advantage is that you can withdraw the extra repaid amount whenever you want.
Extra repaid … and then what?
After you have repaid extra, the overview of your loan shows that the outstanding debt has been reduced by the early extra repayment. From that moment on, you therefore only pay interest on the new, lower debt and you have finished paying off earlier.
Frequently asked questions about early repayment
What happens if I pay off my loan early in the following situations:
I want to pay off my current loan and take out a new one
You cancel your current loan when you have fully repaid your loan. Your ABC registration is then canceled. You then request a new loan from a lender of your choice and then a new loan application starts. Based on your personal situation, it is checked whether the maximum loan amount that you want to borrow is justified.
– I want to pay off a personal payday loan early in addition to my mortgage
You cancel your current loan when you have fully repaid your loan. Your ABC registration will then be canceled. This means that your tax benefit immediately expires.
Do you want to refinance your loan in your mortgage?
If you choose to refinance your loan in your mortgage, realize that you must also pay off this debt. With a personal payday loan you get rid of your debt after a few years, because you pay repayment in addition to interest. If you take a personal payday loan with you in your mortgage, it is smart to pay off as well. Otherwise, move the issue to the future. You now pay less interest, but because your debt gets higher and runs longer, you will continue to pay for your debt for longer.
What happens to my monthly amount if I repay early?
The monthly amount of your loan decreases if you have a revolving credit. The monthly amount consists of interest and repayment as standard. The monthly repayment does not change due to the early repayment, but the monthly interest does. The remaining principal sum will be lower because of the early repayment. And the interest is calculated on this residual debt.
Why doesn’t my monthly repayment change?
The term of the loan is shortened through online early repayment. The monthly repayments remain the same. As a result, you have finished paying off earlier and you owe less interest. If you prefer to reduce the monthly repayment amount, please contact us.