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Paying loan off early?

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  • 06-03-2008 12:23pm
    #1
    py2006
    Registered Users Posts: 9,847 ✭✭✭


    Hi all,

    I hope this is the right place for this question and apologies in advance as it might seem silly that I should ask it.

    I have a small loan with my bank. The loan is over 5 years and this is only the first year. I am in the position to pay it off now and get it out of the way.

    Can this be done or do banks frown on this and throw in some sort of fee/fine for this?

    Thanks in advance.


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    #2
    aodh_rua
    Registered Users Posts: 1,242 ✭✭✭aodh_rua


    If it's a fixed rate loan you'll probably have to pay a penalty. If it's variable you might be ok.


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    #3
    py2006
    Registered Users Posts: 9,847 ✭✭✭py2006


    aodh_rua wrote: »
    If it's a fixed rate loan you'll probably have to pay a penalty. If it's variable you might be ok.

    I am not certain but I believe I chose variable when applying!


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    #4
    broker2008
    Registered Users Posts: 750 ✭✭✭broker2008


    Ask if there are any penalties to pay off early. Ask for a final balance to pay loan off and close account. Put your instructions in writing stating that you understand that there are no penalties in redeeming loan early. Preferably this should be done in person at the branch if possible and ask for confirmation that the account is closed with a nil balance.


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    #5
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    TBH, in the current climate, money back would be welcomed, I accept the fixed rate potential issue but it is very scary now looking for money


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    #6
    The Rooster
    Registered Users Posts: 4,508 ✭✭✭The Rooster


    There are no fines, fees or charges for paying off variable rate loans early.

    The only exception I'm aware of is where there are introductory offers whereby the first year might be the standard variable rate minus, say, 0.5% (this would be more common in mortgages than ordinary term loans). Then there might be a small charge if you repay within that first year.

    Bear in mind that of course the settlement amount to be paid to close the account will be higher than the current balance, as interest charges between now and the last date interest was charged will have to be added.


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    #7
    py2006
    Registered Users Posts: 9,847 ✭✭✭py2006


    The Rooster wrote: »

    Bear in mind that of course the settlement amount to be paid to close the account will be higher than the current balance, as interest charges between now and the last date interest was charged will have to be added.

    Thanks for that! I forgot they would be looking for their interest too! :o


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    #8
    An Gaiscíoch
    Closed Accounts Posts: 252 ✭✭An Gaiscíoch


    Anyone know if I can do this with a blue cube loan???


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    #9
    broker2008
    Registered Users Posts: 750 ✭✭✭broker2008


    The term of loan on these are usually between 1 and 7 years but should be set up as a variable rate loan agreement. However as in all cases it really depends on the lending terms & conditions applied.


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