A Guide to loan repayment penalties

With so many types of secured loans to choose from it is no wonder so many homeowners forget to overlook the small print and ask the question, "is this value for money in the event I can repay the loan earlier than the schedule".

If after having borrowed a homeowner loan from a lender you find yourself in the privileged position of being able to repay the secured loan early, have you ever thought that you might actually be penalised! Early repayment penalties are applied by some lenders. Why? There are a whole host of reasons why lenders charge early repayment fees and depending on the company concerned it could be to cover administration fees, encourage borrowers not to repay their loans early, or simply policy. Depending on the lender, there could be a fixed charge or extra interest to pay. Therefore, always ask the question regarding whether repayment penalties apply before you take out the loan.

There are of course secured loan lenders who do not charge early repayment penalties. The advantage here is that you can save money on interest and fees should you find yourself wanting to repay the loan early.

Remember, always seek independent advice when entering any type of financial agreement.