Early Repayment ChargesMany types of personal loans come with early repayment charges. This is a fee charged to the borrower if the loan is repaid early. The borrower agrees to a particular repayment period when signing for the loan.
Lenders put early repayment charges in place to keep borrowers from paying back the loan early and keeping the lender from learning money. It is very common for personal loans, especially car loans, to have early repayment fees. If you are thinking you might want to pay back your personal loan early, make sure you do not sign a contract with early repayment fees, or that the fees are something you can live with.
Keep in mind that you may not anticipate being able to pay off your loan early when you sign up for the loan. Down the road, however, your situations may change. Make sure you are aware of the terms in your loan, so if you do eventually want to repay it early, you know what it will cost you to do so.
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