Many companies offer the first loan for free, i.e. we pay back exactly as much as we borrowed. In other words – the company does not earn on us. However, you have to pay interest for your next financial help. If you have the option of paying the payday payday ahead of schedule, you better not think long. In the event of early repayment of the loan, the company with which we borrowed the money is required to reimburse us part of the costs that were associated with the commitment.
Pay off earlier – recover some money
Such provisions can be found in the Consumer Credit Act. It obliges not only loan companies but also banks to enable clients to repay liabilities early, which is no more than $ 255 550. In addition, the financial institution is forced to reimburse the costs incurred by the client for the unused scheduled repayment date.
The regulations show that the customer does not have to inform the company about early repayment. In her case, the cost of the loan should be reduced proportionally by the period of time that the client has not used. It is worth mentioning that the customer is obliged to repay the whole liability and only then demand reimbursement of incurred costs. The financial institution has 14 days from repayment.
Lenders defend against the law
Lenders usually refer to these provisions by including the following in the contracts:
The borrower is entitled to return the loan before the repayment date specified in the contract. If all or part of the loan is repaid before the repayment date, the total cost of the loan is reduced by those costs that relate to the period by which the loan was granted.
This formulation is therefore in accordance with the Act.
The act is not as favorable as it seems
However, one should remember about another statutory provision which is to the detriment of the client. The lender has the right to demand additional costs when paying back the loan! We emphasize that this requirement must be clearly indicated in the payday agreement. In practice, lenders rarely use this notation, but that does not mean that we can simply sign the contract without reading it.