The borrower can repay his consumer credit at any time: no penalty can be required by the lending organization below 10,000 dollars in early repayment. Partial or total, the repayment of a consumer loan is governed by the Consumer Code, whose role is to protect borrowers.
Consumer credit: what forms of credit are eligible for early repayment?
It’s very simple: all forms of consumer loans! There are several. Among the most common, personal loan, restricted credit and revolving credit. All can be granted by a bank or a financial institution, and their purpose is the same: the financing of projects of all types (works, car, furniture, household appliances, holidays, etc.), excluding real estate and construction purchases. However, these credits do not have the same mode of operation. Before getting to the heart of the matter, let’s distinguish each of them.
With a personal loan, the borrower can finance one or more projects without having to justify himself to his bank. Clearly, he can use the amount of the credit as he pleases. A personal loan can be fixed rate or variable rate. Unlike the variable APR, the fixed APR provides equal monthly payments throughout the repayment period.
Unlike the personal loan, the assigned credit is, as its name suggests, intended for the purchase of a consumer good or a specific service. We then speak of car credit, wedding credit or work credit. Like the personal loan, its APR can be fixed or variable.
Like the personal loan, revolving credit is not spent on a particular purchase. But unlike the latter, its rate is always variable, and often very high as well. It is by far the most dangerous consumer credit (and even just credit).
Repaying your consumer credit: partial repayment
Repaying part of your consumer credit in advance is possible. It is sufficient for the borrower to notify his creditor of his wish to partially repay his credit. But beware, partial repayment can be refused by the lending institution if its amount is less than or equal to three times the amount of the next due date. In other words, if you repay 40 dollars every month, the lender can refuse a partial repayment if you want to repay 120 dollars or less (3 times 40 dollars). For this clause to be valid, it must be mentioned in the loan contract. The credit offer must also include the minimum amount accepted by the lender for a partial repayment.
How to repay your consumer loan in its entirety?
To repay the consumer credit in full, the borrower is not required to provide reasons to the lending institution. No prepayment penalty is applicable, regardless of the amount.
The borrower notifies his lending institution of his desire to prepay his consumer credit. The creditor communicates to him the amount of capital due. Performing a consumer credit simulation allows you to adjust the monthly payments according to your budget.