You can repay a consumer credit in whole before it becomes due and you can also pay larger-than-agreed instalments. This can mean lower credit costs.
Repaying a loan early is statutory consumer right and it is not necessary to mention this in the credit agreement. If you repay a loan early in whole or in part, the credit costs directed at the remaining loan period must be deducted from the outstanding claims of the lender.
However, the lender has the right to collect the actual costs arising from the measures connected with the establishment of the credit in question that are specified in the credit agreement.
Lender’s right to claim compensation for early repayment
The lender may request a compensation for an early repayment if the loan is repaid early during a period for which fixed interest has been agreed.
The compensation paid to the lender may not, however, be higher than one per cent of the amount to be repaid early if the loan is repaid at least one year before the expiry of the credit agreement.
If the credit agreement expires in less than one year, the compensation may not exceed 0.5 per cent of the amount to be repaid early. The lender may, however, only claim the amount equal to the interest for the period between early repayment and the expiry of the credit agreement.
The lender has no right to claim compensation if
- a maximum of EUR 10,000 have been repaid early during the past 12 months;
- the repayment is under a loan insurance;
- the loan is based on a credit agreement concluded as part of a checking account.
The lender may charge a compensation for early repayment of a housing loan if the loan amounts to more than EUR 20,000 and has a fixed interest or the period for determining the reference rate is at least three years.
As maximum compensation, the lender may charge the loss resulting from the lowering of the interest rate for the remaining fixed-term loan period or the period determining the reference rate. For more information on how to calculate the loss, contact the Financial Supervisory Authority.