What to do if you plan on repaying your loan early.
Can I repay a homeowner loan early?
If your circumstances change, you might consider repaying your loan earlier than planned.
Homeowner loans can have lengthy repayment terms. As many people choose to spread the cost over 10 years or more, a homeowner loan is usually a long-term commitment.
We explore whether you can repay your homeowner loan sooner than planned.
Can I repay my homeowner loan earlier than planned?
During the loan application process, you’ll agree to make monthly repayments for a certain length of time. With homeowner loans, this could vary from between 1 to 20 years – or even more. However, in many cases, you can agree with your lender to repay the loan sooner than you agreed.
Many lenders charge fees for repaying a loan early. These are often called Early Repayment Charges (ERCs) and will differ from lender to lender.
At Evolution Money, it’s simple to repay your loan earlier than planned. As our ERC is based on just two of your standard interest payments.
What are the benefits of paying a loan earlier?
Repaying your loan earlier can often help you save money. If you choose to pay your loan off earlier, this means that you’ll have less interest to pay overall. This could help you save money in spite of any ERCs – though it’s always important to check this is the case.
Many people choose to repay a loan for more financial breathing space. If you have enough money available to repay a loan in full, it can help you free up your finances going forward. As you’ll no longer be tied to your repayments, you’ll benefit from having that extra disposable income each month.
Are there any negatives to repaying a loan early?
One of the main downsides to repaying a loan early is the ERCs. Early repayment charges are an additional cost on top of your loan repayment, which you might not have factored into your plans.
It’s important to compare the cost of the charges against the money you’ll save in total to see what’s best for you. For homeowner loans with high interest rates, an ERC could be a small price to pay.
How soon could I repay my homeowner loan?
Depending on your lender, how soon you can repay your loan will differ. Typically, the earlier you choose to repay the loan, the more money you stand to save overall. However, depending on your lender, this could mean more expensive upfront ERCs.
If you’re faced with costly ERCs and your loan is naturally coming to an end soon, repaying your loan early might not be worth it. It all depends on the charges involved and whether the overall savings are worth it for you.
How can I repay a homeowner loan early?
Many people decide to repay their loan early if their financial situation changes for the better. No matter whether you’ve remortgaged, or you’ve secured a lower interest rate, there are many ways your circumstances can change overnight.
At Evolution Money, it’s simple to repay your homeowner loan early. Simply contact us once you have the available money and we’ll provide you with the details on your settlement costs.
Fuss-free early repayment with Evolution Money
We know that life can change at the drop of a hat. That’s why we aim to be flexible when it comes to early repayment. To find out more about our Evolution Money loans, get in touch with our friendly advisors – or see if you’re eligible for a loan with our quick and simple application process.
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
