You have taken out a personal loan in Germany and want to repay it before the end of the term? Do you even have the right to do so, and if so, under what conditions? Are there extra fees for early repayment? And what happens to the remaining interest? Mutuo Gruppe.de explains what you need to consider when repaying a personal loan early.
As soon as you conclude a loan agreement in Germany, it is fixed for a specific duration so that the monthly instalments can be calculated precisely. In most cases the term can no longer be changed. There is, however, the option of repaying the personal loan early.
The right to early repayment is firmly anchored in the German Consumer Credit Act:
As a borrower you have the right at any time to terminate the loan agreement with three months’ notice and to repay the outstanding amount early.
Early repayment of a personal loan has several advantages: you regain more liquidity and can also save money. The interest payments that would still have fallen due if you had continued the loan no longer apply. You are only obliged to pay interest from the day you sign the loan agreement until the day you repay the loan in full – even if you repay before the end of the term. You also save the account-management fees for the account into which you would have paid the instalments.
What early repayment of a personal loan costs
Because banks lose important interest income when a personal loan is repaid early, fees are charged for settling the loan.
The fees for early repayment of a loan in Germany amount to about € 100, but they vary from bank to bank.
When does early repayment make sense?
Before you decide to repay the personal loan early, you should ask yourself whether the extra repayment is financially worthwhile at all. Attractive as it is to repay the personal loan before the contractually agreed term ends: if only a few instalments remain, the early-repayment fees can be higher than the interest you would save. Early repayment makes sense, for example, if you find a cheaper loan at another institution and want to refinance. You can also request such a refinancing directly via this application. If you are unsure whether early repayment of the personal loan is worthwhile, contact Mutuo Gruppe.de. We will be happy to advise you.
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