Early repayment of a loan is a pleasant opportunity to pay off obligations to the bank, reducing future expenses and avoiding overpayment of money. The procedure and mechanism for early repayment are usually spelled out in the loan agreement, which you conclude when applying for a loan. But if you decide to pay off the debt faster than the schedule, you will need to independently calculate the loan for early repayment.
Instructions
Step 1
Refer to the loan agreement and re-read the clauses "Credit conditions" and "Special conditions" (the names of the clauses may differ, but the meaning will be retained). As a rule, they stipulate the possibility and mechanism of early partial and early full repayment of the loan. The difference between them is quite simple: with partial repayment of the debt amount, the amount of the monthly payment decreases with the same loan term, or, conversely, the loan term decreases while maintaining the payment amount. In case of full early repayment of the loan, the borrower's obligations to the bank are terminated.
Step 2
To calculate a loan for early repayment, calculate the amount of interest that will be charged on the balance of the debt on a specific date - the date of early repayment. Let's say you made the last payment on the schedule on the 10th. Then you decided to settle with the bank ahead of schedule on the 18th. To calculate a loan for early repayment, divide the annual interest rate by the number of days in the current year (365 or 366) and multiply it by 8. Multiply the resulting number by the balance of the debt, which you can find out from the loan repayment schedule. This will be the amount of interest that has run over the past 8 days.
Step 3
No later than 1 day before the day of the planned early repayment of the loan, write a corresponding application to the bank. When that date comes or in advance, deposit the balance of the debt and the amount of interest calculated in the way described above into the account.
