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How should an early repayment charge be read?
Its label alone does not reveal whether a partial payment and full settlement are treated alike.
Ask for a current breakdown before deciding the effect of repaying early. Rules differ by agreement and jurisdiction, so a general guide cannot promise a universal fee-free exit.
Details
- Identify the amount received and the opening balance
- Read fee treatment in the written offer
- Compare the dated repayment schedule
Understand the loan structure
Compare secured and unsecured structures
Record existing commitments and proposed replacement terms separately, including fees, security and remaining payments.