2006-06-30 01:44:11 · 17 answers · asked by Bapboy 4 in Business & Finance ➔ Personal Finance
I think it depends on the original contract. If you repay early, they are going to get less money (the interest over the original period, it may actually double the amount). So the punitive amount is actually the price for loaning you money when you needed it, but your not giving them all the money they planned on.
I.e. If you signed the contract, then it's legal.
2006-06-30 01:48:31 · answer #1 · answered by AlphaOne_ 5 · 1⤊ 0⤋
You have to read your agreement with the lender, some lenders charge a "prepayment penalty" others do not. That is a big thing to look at when you are deciding on a lender, they might have a low rate but they make their money over the long haul.
2006-06-30 01:49:02 · answer #2 · answered by JohnnyStonehaven 2 · 0⤊ 0⤋
Yes, it is... although you don't want to think that. Interest lost due to an early repayment can hurt revenue margin they would have made off of you. If the penalty is less than the interest you would have paid, having paid it on time, then it's worth making the early repayment. Save yourself some money regardless of a penalty.
2006-06-30 02:11:30 · answer #3 · answered by lupering 3 · 0⤊ 0⤋
Sorry friend, it is NOT illegal. You should read the "small print" in your contract. However, you could approach your Company in a friendly way and "reach an acceptable figure". This is particularly so if you are dealing with a small lender. If you are with a larger B.S. go to Head Office........NOT the Branch......they are just puppets.
GOOD LUCK. I would like to know how you get on.
2006-06-30 03:33:21 · answer #4 · answered by tonyflair2002 4 · 0⤊ 0⤋
No it is not illegal. Payment of the mortgage loan before the scheduled due date; may be Subject to a prepayment penalty. You need to check the details of your mortgage.
2006-06-30 04:47:01 · answer #5 · answered by gm1957 3 · 0⤊ 0⤋
No, it's not illegal - it's called a pre-payment penalty and if it's in the loan contract you signed, they can (and will) charge it. Try to re-fi, without the penalty, then pay it off.
2006-06-30 14:33:48 · answer #6 · answered by homeschoolmom 5 · 0⤊ 0⤋
You have to see the Agreement and Terms and Conditions of Loans and find out whether you have agreed for it.Internationally for premature closure of loan "commitment charges"are levied
2006-07-06 22:10:30 · answer #7 · answered by leowin1948 7 · 0⤊ 0⤋
No, but it must be stated in the lending documents. Its called a "prepayment penalty".
It's a common practice.
2006-06-30 01:49:50 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Not if it's in the paperwork always read the fine print before signing.
2006-06-30 01:47:30 · answer #9 · answered by MOVING 5 · 0⤊ 0⤋
don't think it's illegal, but certainly immoral or un-ethical and watch dogs have tried to curb this in recent years but not sure how far they have got!
2006-06-30 01:49:12 · answer #10 · answered by Anonymous · 0⤊ 0⤋