When the opportunity arises, credit borrowers try to get rid of the debt burden as early as possible. Or at least weaken it. But how is the early repayment of the loan? Legally, this procedure is governed by two acts. These are federal laws No. 284 of 10/19/2011 and No. 353 of 12/21/2013. As well as articles number 809 and number 810 of the Civil Code. First of all, it should be said that clients who took a cash loan not for entrepreneurial purposes can repay credit debt earlier than the term specified in the agreement. That is, it is a consumer loan, mortgage, car loan, but in no way a loan for opening and / or developing a business.
Frequently asked questions regarding early loan payments
Early payment with legal entities is stipulated in a strictly individual, special order. In principle, now many banks are only happy when the client extinguishes the debt ahead of time. Previously, financial organizations did not welcome such actions and even charged fines. Federal Law No. 284 legally enshrines the right of bank customers to pay the loan in advance. Up to the complete closure of the loan. In addition, the current crisis in the first place put short-term loans. Organizations in an unpredictable economic environment tend to get as soon as possible from the borrower, and that’s all.
Therefore, Sberbank, Gazprombank, Russian Agricultural Bank and others in every way go to meet such borrowers. However, this does not mean that the borrower can no longer face bank pressure when trying to pay off ahead of schedule. Some bank will establish a six-month moratorium on early payments. Another will take a commission for recalculating the rest. But in this situation the law is on the borrower’s side – this should be remembered. What questions about early loan repayment appear among borrowers most often? So:
- Can a bank prohibit credit indebtedness to the full repayment period, which is specified in the contract? No, he can not. Every client has the right at any time to express a desire for a proactive payment of the loan and implement it. The amount of such advance payment in case of early repayment of a loan or part of a loan is also fully determined by the borrower. The only exception is a loan delay. In the event of a violation by the borrower of its payment obligations, his money will immediately go towards paying for the missed contributions and penalty interest. And only then the remaining funds can be used for early repayment of the loan.
- Is the full loan repayment service free of charge? The basic conditions for early repayment of the loan are common to all public and private banks. The financial institution has no right to charge any additional interest or commission for the early settlement of the loan. Quite often, a clause is immediately indicated in a bank agreement, which stipulates the client’s ability to deposit any amounts in order to settle accounts with the bank more quickly.
- The client has the right to prematurely pay for the loan in part or in full, regardless of how much the loan is repaid and how much time is left until the loan is closed, as stipulated in the contract. If we are talking about a partial early repayment, the bank should make some recalculation of credit debt.
Rules and restrictions
Although the client is relatively free in terms of early repayment of debt, there are still some limitations here:
- if the borrower has decided to deposit a certain amount in advance, the bank should be notified about this – preferably by a written statement, but you can leave a request in the Internet office or make a call to the call center;
- and this should be done 30 days before the date of making the unplanned contribution. Although the rules for early repayment of the loan are flexible, and in accordance with paragraph 2 of article No. 810 of the Civil Code of the Russian Federation and part 4 of article 11 of Federal Law No. 353, the warning period can be arbitrarily shortened. It is not uncommon when the loan agreement specifically specifies the period from the moment of the application until the early closing of the debt, which the client must comply with;
- It is more convenient for the banking system, as well as for most borrowers, that the payment on account of the preventive repayment is made along with the usual monthly payment on the same day and hour (according to paragraph 5 of Article 11 of the Federal Law No. 353). However, if necessary, the installment date can be moved to any time convenient for the borrower.
Changing credit conditions and practical example
Do not mix the regular and unscheduled installment of a loan. When a person who has taken a loan decides to deposit any amount in excess of the amount, then on the day of the regular payment you must pay money for this very monthly payment, taking into account annual interest. After the funds are transferred to the bank, a situation will arise when:
- monthly payments will decrease, and the period of the loan will not change;
- the time until the full closure of the bank loan is reduced, and the monthly installments remain the same.
That is, it will be necessary to recalculate the loan with early repayment. Usually, a bank customer chooses a more suitable option for himself. Nevertheless, the bank, for its part, may insist on some kind of option. So, if the periodic loan contributions under the agreement are annuity (uniform), then the bank is inclined to the option of reducing the amount of monthly payments. If payments under the contract are differentiated (gradually decrease as they are paid off), then the bank may begin to insist on reducing the time of lending. It is worth giving a simple example. The borrower takes 100 thousand rubles for one year. In a year, the total amount that he must return to the bank will be 120 thousand rubles, that is, taking into account the interest – 20 thousand rubles. Accordingly, the monthly fee will be equal to 10 thousand rubles. Approximately 8,350 rubles will be spent on leveling the loan body and 1,650 rubles – this is 1/12 of the annual interest (an error of up to 100 rubles). Let there be a situation of partial early repayment.
The first two months the borrower pays on schedule, and the third decides to make an additional 30 thousand rubles. Consequently, in the third month 40 thousand rubles will be paid (together with the monthly payment). Plus 20 thousand rubles for the previous two months. Total after the partial early repayment the client will owe the bank another 60 thousand rubles (120 thousand – 60 thousand). If the borrower did not contribute anything extra, then he would have to pay another 9 months of 10 thousand rubles each. Now it remains to pay 60 thousand rubles, which, with unchanged payments, will close the loan in 6 months. Either divide 60 thousand for 9 months, and with the same crediting period, monthly it will be necessary to pay not more than 10 thousand rubles, but 6 666 rubles.
It should be noted that here the calculation was carried out at ANNUAL percent. That is, the amount that the borrower owed the bank in any case for taking the loan was calculated in advance. And it could be that the client took the same 100 thousand rubles and also for the year, but interest is charged on months from the monthly payment. For example, 20% of 8,333 rubles (100 thousand rubles divided by 12 months). Total loan will be repaid again at 10 thousand rubles per month. But in case of early repayment, the amount paid will be deducted only from the loan body (100 thousand rubles). Consequently, in such conditions you can save a great percentage. By the way, this is why other banks are opposed to early repayments. And they can even make such an ardent client in the “gray list”.
It’s always better to make a little more.
Attentive reader will notice that in the calculations in some figures there will be a discrepancy of one or two hundred rubles. Here the numbers are rounded for convenience and clarity. After all, as a rule, with recalculations and early payments, uneven numbers are obtained “with kopecks”. For example, the amount of the main regular contribution is 10,552 rubles and 50 kopecks. And the client has on hand 30 thousand rubles. So, it is better to indicate that the amount of early repayment is not 19,500 rubles, but 19,400 rubles. Since the bank will first of all withdraw money on account of the monthly installment, and only then – on account of preventive repayment. And if the figure is less than the one that the borrower indicated in the application, then this money will simply go to the bank account tied to the loan.
And they will be shot from there on a regular schedule. The same can happen if a bank customer simply deposits money into his credit account without notifying employees of his intention to settle with an institution earlier. A similar situation will develop if the borrower is late to transfer additional funds to the bank. The money for early repayment of the loan in the bank is best made on the eve of the date on which the regular monthly loan payment takes place. It should be borne in mind that with the simple withdrawal of the borrower’s funds to their credit account, their return is a very long and tedious procedure, which often does not even make sense to start. Therefore, accuracy and punctuality should be observed.
Early closing of the loan at 100% and final instructions
If there is a full early repayment of the loan, then you need to know the exact amount of the credit balance. You can calculate it yourself, but it is always recommended to check with the data provided by a bank specialist. Usually the person receives the necessary information in a few hours by phone call, SMS message or by e-mail. But according to part 7 of article 11 of the Federal Law No. 353, the bank has the right to tell the borrower how much he owed, within 5 calendar days. After all the money put to the bank has been returned to him before the end of the loan period, the borrower is advised to take an extract from the bank specialist that the loan has been canceled and the client no longer has any obligations to the institution. Once again, you can identify the following main stages in the process of early payment of a bank loan:
- check for overdue fees and fines; if there is, pay for everything;
- In advance, write and submit a corresponding application to the bank (an employee will issue a sample form), make a copy of the application;
- depositing the desired amount with regular payment;
- it is recommended to check in a few days whether the expected debt has been written off;
- for full premature payment, it is worth taking a certificate confirming this fact.
Finally, it must be said that those who made out a loan through obtaining a credit card are much easier. There is no need to apply and waste time on waiting. As a rule, the crediting period is not fixed here either. That is, you can put money on the card at any time. And they will automatically immediately go to the repayment of credit debt. Only you need to know the exact amount of monthly deductions in order to correctly consider the amount when making. In general, it is recommended to keep the balance – it is possible to repay the loan before the main term, but with one bank it is too often not desirable. And you need to remember about some of the subtleties described in this article of an informational nature. Otherwise, save will not work.