According to most loan agreements, you can pay off the debt on schedule, or deposit the entire amount some time after the opening of the agreement, thereby reducing the interest overpayment. To really save on a loan in this way, you need to know how to benefit from it.
Instructions
Step 1
Reread your copy of the loan agreement. Find in it the item on early repayment of the loan. All the conditions for this action will be indicated there. The bank can establish a moratorium on loan repayment within several months after the opening of the agreement. This means that you can only deposit money after a certain date. Also, for early termination of the contract, penalties may be provided. The bank uses such a measure in order not to lose profit itself, because the client, if the entire amount is returned, will not have to pay interest for the entire duration of the contract. If this is relevant, find information about whether it is possible to repay the loan ahead of schedule in parts, or whether it is possible only after the entire amount has been paid.
Step 2
Find out the exact amount you will need to deposit. It can be found in the payment schedule, in the column dedicated to the balance of the principal debt after payment of the next monthly payment. If you don't have a schedule, call your bank's call center. By giving your name, passport details and, if available, a code word, you can find out how much you have left to pay.
Step 3
Calculate how profitable early repayment of the loan will be for you. To do this, add up all the amounts that you will save on interest on the loan and compare them with the bank's commission and the penalty for early termination of the loan agreement.
Step 4
If early repayment turns out to be profitable for you, come to the bank with your passport and money. Fill out an application for closing a credit account, then deposit money through a cashier or ATM with a cash accept function. It will also be useful to get a certificate from the bank that you have fully repaid the loan. This will save you the risk that additional amounts will be required from you later. It is best to keep such documents for at least several years.
