Early repayment of a loan: extinction and penalty calculation

If there is the possibility of extinguishing the loan thanks to an unexpected availability of liquid, it is good to close the financial report at the bank where you are in debt. For this reason there are some c lausole in case of early termination of the loan.

The early repayment is used for convenience,

To eliminate the payment of the monthly installment or to request a new loan

To eliminate the payment of the monthly installment or to request a new loan


Through the option of early repayment the current financial report will be closed, and a new loan or first home loan can be requested.

Findomestic and the possibility of early termination

An example is offered by the Findomestic bank where, if it is decided to close the relationship with an early redemption by returning the residual capital in a single solution, this will also include the interests.

Starting from 1 June 2011, in the event of early repayment, the payment of a penalty to the customer, equal to 1% of the amount repaid in advance, must be considered. This if the loan has already been in place for over a year; if the amortization period is less than one year, the penalty will be 0.5%.

Adds the clause that it is not necessary to pay the penalty if the amount reimbursed is equal to the total of the residual debt, or if it is equal or less than 10,000 euros.

Extinguishing count

There are various possibilities to request early repayment of the loan



It is also possible to carry out simulations with some software present online. In some cases it will be enough to go to the branch of your own bank and request the total to be paid (precisely, the extinction count ) which will require bureaucratic materials.

In other cases, it will be necessary to make a request by mail via registered letter with return receipt. After receiving the reply, the total balance will be paid, via a bank or postal transfer. Once this is done, it will be possible for the client to request a new personal loan or a mortgage.

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