What is the best way to repay a loan early? How partial early repayment of a loan occurs - main points

What is the best way to repay a loan early? How partial early repayment of a loan occurs - main points
What is the best way to repay a loan early? How partial early repayment of a loan occurs - main points
21.10.2019

When applying for a loan, the loan agreement stipulates the terms of its repayment - the terms and amounts of payments. You can repay the loan either in parts - periodic payments, or by paying the entire amount at once (this option is much less common). If the borrower has the opportunity to repay his debt ahead of schedule specified in the payment schedule or in the contract, he can repay the loan early.

It does not matter whether the borrower is ready to pay the entire amount of the debt at once, or whether he only has the money to exceed the next periodic payment. In the first case, we will talk about full early repayment of the loan, and in the second, only partial.

Which loan can be repaid early?

Civil legislation allows early repayment of any type of loan:

  • interest-free;
  • a loan with interest payment, but issued for personal needs by a citizen borrower;
  • business loan.

But each of these cases will have its own characteristics of early loan repayment.

Penalties and restrictions for early loan repayment

The law allows you to repay a loan early without any fees or penalties. Even if such conditions are specified in the contract, they can be considered invalid.

There are no restrictions on early repayment of an interest-free loan. You simply deposit the amount you have at any time convenient for you.

If you took out a loan for personal or family needs, there will be some time restrictions. You need to before making “extra” Money notify the bank 30 days in writing. The loan agreement may also stipulate another, more short term for notification of early loan repayment.

In case of obtaining a loan for business purposes early repayment loan is possible only with the consent of the bank.

What actions need to be taken to repay the loan early?

  1. Review your loan agreement for early repayment provisions. If a shorter period is not specified there for notifying the bank about early repayment of the loan, then you must be guided by the law's provision of 30 days.
  2. Prepare a notice for the bank about early repayment of the loan in in writing. Please indicate in this document the following data: loan agreement number, full name of the borrower, full or partial early repayment of the loan is expected, amount and repayment terms.
  3. It is advisable to personally take the notice of early repayment of the loan to the bank and hand it over to the responsible employee against signature. If this cannot be done, then send a notification by registered mail with notification to the bank.
  4. On the appointed date, deposit funds to repay the loan.
  5. If you make full early repayment of the loan, then ask the bank for a certificate confirming full repayment of the loan and that you have no debt.

Advantages for the borrower when repaying the loan early

When repaying a loan early, the following can be distinguished: positive points for the borrower:

  • reduction in interest costs - the bank can only demand interest that accrued until the day the loan is repaid;
  • shortening the loan repayment period or reducing the size of periodic payments (with partial early repayment of the loan);
  • formation of a good credit history and the ability to apply for a new loan.

When applying for a loan, the borrower should be interested not only in the interest rate, but also in the methods of repayment. Finding out everything on time is the only way to avoid fuss and worries in the future.

In general, repaying a loan is quite simple. As a rule, there are no pitfalls, but the methods are different. The main thing is not to deviate from the prescribed schedule.

Loan repayment is nothing more than the size of payments, their timing and, of course, the form in which these payments are made. In most cases, lending involves long-term payments. In some cases, payments are made in the same amounts, and in others, these amounts can differ greatly from each other. Sometimes it is possible to repay the loan ahead of schedule.

Loan repayment is carried out different ways. More often, the required amounts are deposited through the cash desks of creditor banks. This method is good, since funds are transferred without any commission. It is also good because the risk of errors is minimal.

The main disadvantages are that some banks do not have many branches, they may not be open on weekends, and you often have to stand in queues. These disadvantages are not so significant, but still worth mentioning. In general, we note that you can pay a loan at a bank not through a cash register, but through a special machine.

Loan repayment is also possible via mail. In principle, this is convenient, but do not forget that you will be asked for a commission. It can reach three percent. In addition, do not forget that money is sent by mail not instantly, but with a delay. Incorrect calculations will cause trouble.

A loan from almost any bank can be repaid through Sberbank of Russia. The thing is. That there are branches all over the country. Even in rural areas. Interbank transfers are, of course, convenient, but they are paid services. It is also worth remembering that they are not instantaneous.

Repayment of the loan is also possible through Simply, the person will receive in hand the amount from which the loan installment has already been deducted. In principle, it’s convenient.

Modern people pay off loans via the Internet. It's easier than it seems. It is enough to create the required template once. Money can be transferred from a card or through electronic payment systems (WebMoney and so on).

Almost all modern mortgage programs give you the opportunity to pay off the entire loan ahead of schedule. Partial repayment of the loan is also possible. The point is that the borrower will pay not for a month, but for several months in advance. Also, if the loan is partially repaid, the term and duration of loan repayment may not change, but the amount of monthly installments will change.

Refinancing means obtaining a loan with a value lower than that of a previously taken loan. It is used to repay this loan. Today, financial organizations are in constant competition. For this reason, they keep lowering interest rates. Refinancing can be a great move, but you should carefully prepare the documents. Since there is a possibility that in addition to the main payments, there will be an obligation to make some additional ones.

The ones listed above are the most common. They are all convenient in their own way. Everything is done so that the borrower does not have problems transferring money within a strictly defined period. Loan repayment must be timely. If you fail to pay on time, you may lose additional funds, since all sorts of fines for late payments are often provided.

Since on average there are 3 loans per Russian citizen, we decided that IT specialists would also be interested in learning how to repay their loans and debts correctly and profitably.

Getting a loan is very easy, but paying off creditors is much more difficult. As practice shows, you can crawl out of the deepest financial hole if you don’t despair. Our tips and methods will help you pay off even large debts: pay off debt wisely, find money to pay, choose the best way payments.

How to pay off credit card debt

1. Conversation with creditors
Under no circumstances should you disappear, drop calls or ignore email notifications. As soon as you feel that the situation is critical and you will not be able to repay the loan on time, inform the lender about this. Please clarify that you are not going to deceive the bank, that you have been regularly paying the loan until specific circumstances arose, and that you are going to regularly pay the feasible amount. No one is interested in long term legal proceedings, on the contrary, they will probably meet you halfway.

You may be offered a reduction in interest rates for a while, or even a waiver of some late fees or a change in payment schedule. All this will help you move on, and, alternatively, your credit history will not suffer. Of course, you should stop using a credit card, fixing the debt so that it does not increase.

Advice:

  • Tell them you can't pay anymore.
  • Record the debt.
  • Try to soften the conditions.

The bank is no less interested in repaying the loan than you are. There are cases when banks can close a loan even at a loss, but this will not affect the client’s credit history in any way - a normal business process of cost management.

2. More than the minimum payment

Credit companies and banks love it when you pay exactly what you need. It seems to you that you are paying off the loan, albeit little by little, but in reality your debt is only increasing due to interest. If you pay at least a little more, it will be more profitable, as it will reduce payment terms. As a rule of thumb, approximately 10% of your income is spent on random things, so try to immediately deposit it into your credit account.

For example, let’s take a credit card with an exhausted credit limit of 100,000 rubles. The table of minimum payments for this amount will look something like this:


Months

1 month

2 month

3 month

4 month

5 month

6 month

7 month

8 month

9 month

10 month

11 month

12 month
Min. payment
RUB 12,083.33
RUB 10,875.00
RUB 9,787.50
RUB 8,808.75
RUB 7,927.88
RUB 7,135.09
RUB 6,421.58
RUB 5,779.42
RUB 5,201.48
RUB 4,681.33
RUB 4,213.20
RUB 3,791.88
Redemption
10,000 rub.
9000 rub.
8100 rub.
7290 rub.
6561 rub.
5904.90 rub.
RUB 5,314.41
RUB 4,782.97
RUB 4,304.67
RUB 3,874.20
RUB 3,486.78
RUB 3,138.11
Interest
2083.33 rub.
RUB 1,875.00
RUB 1,687.50
RUB 1,518.75
RUB 1,366.88
RUB 1,230.19
RUB 1,107.17
RUB 996.45
RUB 896.81
RUB 807.13
RUB 726.41
RUB 653.77
Credit body
100,000 rub.
90,000 rub.
81000 rub.
72900 rub.
65610 rub.
59049 rub.
53144.10 rub.
RUB 47,829.69
RUB 43,046.72
RUB 38,742.05
RUB 34,867.84
34864,78

As can be seen from the table, the minimum payment does not pay off the debt for one calendar year, as many believe

By the end of the year, you will only be able to pay 60,000-70,000, and interest will be charged on the remaining debt. In fact, the minimum payment is designed in such a way as to make your loan as long-term and profitable as possible for the bank. If the minimum payment is made even slightly late, all of it can be used to pay off fines, interest on overpayments, penalties, and current interest. You will pay, but the debt will not decrease at all.

Advice:

  • To close the card in less than a year, make x1.5-2 minimum payments
3. Plan a budget

There are probably things on which you spend more than necessary, thinking that this minimum amount won't give anything. What difference can a cup of coffee make when you need to pay off a car loan? It sounds naive, but write down all your expenses and you will see where you can save. It's not fancy, but even a small amount will be enough to cover the interest payments and also pay a little more than the minimum payment. This is exactly the money you spend on nonsense.

Advice:

  • Optimize your expenses
4. Try to increase your income and prioritize

There is no general advice. Some people can take more working hours or days, others can work longer and receive a bonus. Some earn money using their skills and hobbies. Take any temporary job, look for part-time work, you need to improve your financial situation. If you have a car, get a job as a taxi driver. You can try selling unnecessary things. You can buy anything from the old one washing machine to a broken children's bicycle. Something that has been collecting dust on your balcony for years can bring you $20-$50. Already enough for the minimum payment.

If you are saving money for education, it may be worth spending it now by pushing your plans back for a year. If there are two cars in the family, you can sell one of them, so you will not only receive a large sum, but also will not spend money on gasoline and maintenance, or renting a garage. Ride on public transport more inconvenient, but cheaper. Try to give up hobbies and hobbies, this will free up a certain amount each month and allocate time for part-time work.

Advice:

  • Increase your cash: new income = new credit opportunities.

American methods of debt repayment

1. First of all - with the highest quoted rate

It would seem obvious, but many try to first pay off small loans in order to pay off at least part of it. In this case, you pay more interest for the service, so the total amount is higher. For example, you have one loan at 13% per annum, the second at 10%. At equal amounts loan, focus on making payments on the 13 percent loan while paying the minimum payments on the other.
You will have to pay interest anyway, but this way you will make it less.

If the amounts are different, then it is necessary to bring interest rates into line with these amounts. Let's assume that we have two credit cards: Alfa Bank, with a debt of 100,000 at 25.9%, and Sberbank with a debt of 80 thousand at 19%. We bring the Sberbank rate to the Alfa Bank rate:
19*(100/80)=23.75%. That is, the main efforts must be made to repay the loan from Alfa Bank.
If we assume that the amount of debt in Alfa Bank is 50 thousand, then the reduced rate of Sberbank will be 19 * (80/50) = 30.4%, which makes repayment of this debt paramount.

Advice:

  • Count your loans: pay off those that are profitable, not those that you want.
2. If the accruals on several loans are approximately equal

Reverse method: if you have several loans with equal charges, pay off the smallest one. This is the so-called “snowball method”: paying off one loan motivates you to pay off the next one, while you reduce their number. Most people find it easier this way, and they subconsciously lean toward this method. Please note that if you are facing confiscation or there is clearly more accrual on one of the loans, this method is excluded, pay off the larger loan as described above!

Advice:

  • If you have equal debts, try to close a specific loan
3. Restructuring and refinancing

If you took a large amount to develop a business or buy an apartment and paid off at least a third, you can ask for restructuring. It is beneficial if the bank now provides loans for the same purposes at lower interest rates. They may meet your needs, and you will receive not only a reduction in your total debt, but also an extension of the term on the new loan. That is, you can use restructuring to reduce your monthly payment by increasing total term loan. Restructuring makes sense when interest rates differ significantly, since you will have to pay commissions and some other fees when you apply, so carefully calculate the benefits.
By the way, not all banks agree to refinance own loans, so you can try to sell the loan to another bank. For example, refinancing mortgage loans VTB24 and Sberbank are involved. Raiffeisenbank can refinance both its own and others' car loans.

Advice:

  • If you can’t pay, restructure: restructuring will collect everything into one payment and reduce the monthly amount.
4. Repayment from another credit account

If you want to repay a loan from another bank credit card, in which you have no debt and there is a certain amount that you can use, make sure that it is profitable. Even if you can use the amount at 0%, there are always fees associated with transfers, so you will lose some money, but at the same time increase the number of loans that you will have to pay off at the same time. If you choose this method, to calculate the amount, divide the debt by the number of months during which the interest-free loan is valid, and make sure that you have enough funds to repay.

Advice:

  • Avoid fines: use other loans if the situation requires.

Comparative table of American repayment methods:

Repayment method Advantages Flaws When it suits
We pay off the loan with the highest accrual Every month you will save more You need to make every effort when paying high interest rates on the main loan and minimum payments on the rest When it is important to save on interest, when there is a risk of property confiscation
We pay off the smallest loan The number of credits decreases, you see the result Not always profitable from a financial point of view, not suitable if the loans are not at least approximately equal in terms of accruals When you need to at least start paying off loans and see that the result is achievable
Restructuring or refinancing Allows you to save significantly if calculated correctly: extend the payment period, reduce the interest rate and monthly payments Additional costs for re-issuing a loan and insurance. It makes no sense if the remaining payment period is small. When the period of remaining payments is longer than the payments made, and the loan amount is quite large.
Repayment from another credit account You save on interest, so you pay off your principal faster The need to make monthly payments on an interest-free credit card on time. When the term of the interest-free loan is long enough and you can pay this amount monthly

These simple techniques will help you avoid various unpleasant situations with loans. Loans are very useful and the right tool, expanding our capabilities, the right attitude towards loans is the key to success.

Many of our citizens apply for a variety of bank loans. At the same time, they do not know how profitable and painless it is possible to save on overpayments. Which repayment scheme should you choose? Is it possible to get my money back for insurance?

Let's consider all the questions in more detail.

How to repay a loan economically, the most profitable schemes

Today, the most profitable loan repayment schemes are considered to be:

  • differentiated scheme;
  • annuity option.

If we talk about the first option, then it implies slight reduction in monthly payments. In simple words, you initially need to pay dues to large amounts, but in subsequent months the size decreases.

This scheme is beneficial when designing mortgage lending or to buy a car.

You can calculate the approximate amount using the formula:

interest rate+ fixed part = payment.

In this formula, the fixed part is the repayment of the main body of the loan. The percentages themselves are determined as follows:

(balance*bet)/100.

Let's look at an example: The client received a loan in the amount of 1 million rubles. The loan period is 20 years and the interest rate is 12%.

Thus, the total amount should be divided by 240 months (20 years), and a monthly fixed amount of 4 thousand 166 rubles is obtained. However, please note that the interest rate will vary. For example, for the first 10 years when paying 50% of the principal loan amount, the amount is calculated:

((0.5 million x 12%)/1 year)/100% = 5 thousand rubles. Thus, the total amount of the monthly payment is 9 thousand 166 rubles.

This scheme is perfect for citizens who:

  • receive unstable wages;
  • have a desire to significantly reduce the amount of overpayment;
  • issues loans for a long period.

If we talk about the annuity option, it is used by those citizens who take out custom loans.

With such a scheme it is produced calculation of the total cost of the loan in addition to a one-time commission fee. The entire amount is divided by the loan period. The borrower will have to pay monthly fixed payment.

This option is advantageous in that there are no problems with the size of the monthly payment. The borrower knows when and how much he needs to pay.

This scheme is perfect for those categories of borrowers who:

  • have a stable salary;
  • cannot financially contribute more than the required amount;
  • issues loans for a short period.

How to profitably repay a loan early

The possibility of profitable repayment of loans ahead of schedule largely depends on factors such as:

  • the presence or absence of penalties for early repayment of the loan. In simple words, is this possibility allowed by the bank;
  • Is the monthly payment plan specified in the agreement?

Analysis of the loan agreement

Before the borrower, when funds become available, goes to the bank to repay his loan early, you need to pay attention to some nuances:

  • for short-term lending periods, the possibility of early repayment of the loan, as a rule, is absent;
  • the agreement may provide for a restriction on early payment of the loan in the first 6 months of its use;
  • the agreement may include a restriction on minimum size payment upon early closure of the loan.

If the agreement does not provide for any restrictions, you can consider the issue of early termination of loan obligations (repay the loan early).

What is the procedure for early payment of the loan?

Any of the borrowers has full rights during the period of validity of the loan agreement repay it in full or in part. But, it is necessary to remember that, despite the absence of restrictions in the agreement, the borrower must contact a bank employee and notify him. You must notify of your desire no later than 30 calendar days until the day when the payment for early repayment of the loan is made.

Moreover, when contacting a bank employee, the latter will ask you to draw up an application for the right to early repayment of the loan. This document is drawn up in the presence of a bank employee according to the template established by them.

How to close a bank loan correctly

It is necessary to remember that repaying a loan from a bank, for example, from Sberbank, does not mean that the loan is completely closed and the bankers have no claims against the borrower.

Let's look at the procedure for closing a loan using Sberbank as an example. This scheme is also suitable for all other banking institutions.

So, the algorithm is as follows:

  1. 1 step. Initially, you need to ask bank employees for a certificate confirming the closure of the loan and the absence of claims. It is worth noting that some banks refuse to provide it, and therefore it is necessary to justify your request with Article 15.26, which includes penalties for bank employees who refuse to issue this document. A fine is imposed in the amount of 50 thousand rubles.
  2. Step 2. Complete closure of bank accounts. This means that accompanying accounts could have been opened when applying for the loan. If the manager declares their presence, you must ask him to close them. You may even need to write a statement - it is drawn up in the presence of the bank manager.
  3. The final step. Mortgaged property. After the loan is fully repaid, it is necessary to remove restrictions on. This should be done automatically by bankers, but being informed means being calm. If the encumbrance is not removed, it is necessary to demand that this restriction be lifted.

Having completed these simple steps, you can confidently say that the loan is completely closed and now you don’t need to worry.

How to pay off a loan faster if you have no money

If the borrower has a desire to repay the loan as quickly as possible, there are several options:

  1. Contact relatives or friends. This option involves borrowing a certain amount from your relatives or knowing funds that will help you quickly repay the loan. Agree, it’s easier to pay off debt to “your own” than to deal with debt collectors.
  2. Get an extra job. Here, as they say, everything depends on the region of residence or on the very desire of the borrower. You can find an evening job that will allow you to quickly repay the loan, or try your luck on freelancing sites.
  3. Savings or tax deduction. This option involves using your deposit (if you have one, of course). If there are no personal deposits, you can contact tax office at your place of residence and fill out an application for tax deduction. As a rule, this will be an amount of approximately 13% of the interest amount (the loan itself). After receiving the deduction, you can use these funds to pay off the loan.

The loan has been repaid, is it possible to return the insurance?

If the loan is fully repaid, when trying to return the insurance funds, one of several options may occur:

  • Option 1. The insurance company may partially reimburse the funds if more than 6 months have passed since the signing of the contract. Usually, Insurance Company refuses to pay funds, arguing this at great expense for administrative support. If the refund amount is over 100 thousand, you can request a printout of the insurers' costs.
  • Option 2. Insurance funds can be fully returned only in situations where the loan is repaid within the first 2 months from the date of registration of the insurance policy.

In any of the options, you must contact the insurance company with the following list of documents:

  • passport;
  • a copy of the loan agreement;
  • a certificate from the bank confirming the full closure of the loan.

In what cases does the insurance company pay the loan?

Insurers can pay a loan instead of the borrower only in those situations that are specified exclusively in the insurance policy agreement.

There are several types of insurance, namely:

  • insurance for the life and health of the borrower;
  • insurance for the safety of property (collateral).

If we talk about the first type of insurance, then this means, for example:

  • death of the borrower;
  • establishing the fact of disability (serious illness, possible disability, etc.).

The second option implies the presence of any damage to the collateral that was not intentionally caused by the borrower himself:

  • natural disasters;
  • fire;
  • flood and so on.

It is worth paying attention that all the conditions under which the insurance company repays loans independently are specified in each specific agreement. FOR this reason, we can say that the conditions are different everywhere and you need to thoroughly study the contracts before signing them.

How to repay an annuity loan correctly and profitably

With an annuity scheme the best solution will be an attempt minimizing the monthly payment amount and at the same time, without modifying the lending period.

In simple words, every month the borrower will pay a reduced payment, and save the difference from the previous amount.

Eg: The loan is valid for 20 years. For the first 10 years, the borrower will pay not 10,000 rubles, but 7,000 rubles. But after 10 years, the loan will need to be repaid 13,000 rubles.

However, there is a nuance: in 10 years, with monthly savings, you can collect an amount that is enough to repay the loan early and thereby save money.

Collection by the guarantor of the paid loan from other guarantors

One of the guarantors has the right to recover judicial procedure from the second guarantor a certain amount of the loan, only if subsidiary liability is not established.

Article 325 of the Civil Code of the Russian Federation clearly regulates this issue: fulfillment of subsidiary liability in full exempts the remaining guarantors from fulfilling the claims of creditors.

Moreover, according to Article 365 of the Civil Code of the Russian Federation, a guarantor who has paid off the debt of the main borrower at his own expense is fully vested with the powers of a creditor in relation to the second guarantor.

This means that in court he has every right to recover not only part of the funds, but also to demand a fine for failure to fulfill his obligations as a guarantor.

Who should repay the loan after the death of the borrower?

In that case, his debt passes to his immediate heirs. But the heirs have every right to avoid such troubles. This is only possible if they do not claim the inheritance.

If we talk in simple words, then the loan is repaid by the one who entered into the inheritance of a deceased borrower. If there are none, the remaining amount of the debt is paid by the insurance company.

If the borrower does not pay the loan, should relatives pay?

Relatives of an unscrupulous borrower will have to pay his loan only if one of them is a guarantor, otherwise they have nothing to do with the borrower’s debts.

If the borrower is unscrupulous, the funds will be paid by the guarantors.

Responsibility for non-payment of a loan: what will happen if you don’t pay at all

If the borrower refuses to repay the loan or is unable to do so due to financial problems, the bank may charge penalties or impose a penalty.

You can learn more about interest from your agreement, which contains everything (each loan specifies its own terms of punishment).

The worst option is for the bank to go to court and... The purpose of the seizure is considered to be their sale at auction and reimbursement of the loan amount at this expense.

Video consultation

About the rules for early repayment - in the program “Morning with Gubernia”

You've probably heard about partial early repayment of loan debt, but don't know what benefits it promises and what it is intended for? Do you want to save on interest and not pay a huge overpayment on the loan? In this article we will discuss in detail the issue of early loan repayments - and the advantages they give to the borrower.

Is it beneficial for the borrower?

Bankers don't like late loans- you probably know this from the news. One has only to listen to what measures are being taken in relation to borrowers who are in arrears.

But for many, an unpleasant discovery will be the fact that early closure of a loan - seemingly interesting to the lender - is not particularly welcomed by most of them. And it seems like it should be the other way around, but for some reason there are certain conventions and difficulties in the matter of quickly paying off debt.

Let's figure out why this happens.

There are two standard circuits loan payments: and differentiated. With the first method, most of the contribution goes to pay interest, and the principal debt is repaid insignificantly. With the second method, the payment amount is divided equally between paying interest and covering the principal debt.

When a partial deposit is made beyond the required amount, the money is used to cover the principal portion of the debt (the original loan amount). Let's look at an example of what this looks like.

Example: you have a consumer loan from Sberbank in the amount of 150 thousand rubles, issued for five years. The payment scheme is annuity. The rate for the use of funds is 23.9% per year.

Every month you pay 4,315 rubles under the agreement. The total debt is 266 thousand rubles, of which the overpayment for the use of funds is 116 thousand.

You paid regularly for four months, then unexpectedly received a large bonus. And you now have an additional 70 thousand rubles, which you can contribute to the debt.

The debt at the time of the advance payment was 240 thousand rubles. After receiving 70 thousand rubles, the creditor recalculates the current debt, since these funds cover the principal debt (150 thousand) and do not go to pay interest.

Thus, the amount of debt is reduced and interest is recalculated– as a result, the total overpayment on the loan decreases. If next time you have free cash, you can also use it for an early payment - as a result, the loan will become more profitable, and you will pay the lender much faster.

Therefore, the answer to the question of whether it is profitable to use this method is clear - it is profitable. Especially for those who pay not a consumer loan, but a mortgage loan.

On the pages of our website you will also find out what loans are offered and how profitable its offers are.

Do you want to know which bank is better to borrow from? consumer loan? We'll tell you about the best banking offers.

On our website you will also learn... We invite you to read the detailed instructions.