If you have received extra money and wish to pay off your loan or financing, find out how to do it and what advantages you can get with early repayment!
The early repayment of loan debt can be very worthwhile! This is because banks discount interest on installments that would be due in the future. That is, you end up paying less than you would if you paid off within the agreed term.
What is early settlement of a debt?
Early settlement is the partial or total settlement of a debt before its maturity, by means of interest reduction, proportional to the contract settlement time.
It can be done with the use of its own resources (payment by payment slip) or with resources coming from other banks, such as debt portability for other services with more advantageous rates.
In the case of debt transfers between banks (by portability), the bank receiving the loan debt will pay the amount of the installments to the home financial institution which may be another bank or any other financial institution that is regulated by the Central Bank.
How to repay the loan
The consumer who wants to prepay the debt or loan should look to the bank or lender and request the debit balance. In this document you should eat how much was paid, what is left to pay and the amount of interest, but will have the discount that would be charged.
Make sure that the discount amount is worth it to you and fits your budget, so settle the loan early.
Remember that it is your right to anticipate the payment of a debt and no additional fees can be charged for it!
How to know the amount of the outstanding balance on the early settlement date?
Request from the institution that performed your credit operation the amount of the outstanding balance for early settlement of the debt. To check the evolution of your debt, ask the bank for the discharge spreadsheet with the detailed calculation for the proportional reduction of interest. In this document you should see how much was paid, what is missing and the amount of interest.
With the spreadsheet in hand, your contract request, receipts, statements, vouchers, and other operations and service documents. Get the information of what is being charged and check if everything is in agreement with the agreement between the parties.
To pay off your debt, you will have to pay the current outstanding balance (present value) of the unpaid installments which does not fully exempt the interest. Interest is reduced (not example) in proportion to the time the customer would still have to pay off the debt.
If you decide to settle your debt, the bank or financial institution must then offer a discount commensurate with the amounts paid in advance.