Achieving financial goals like home renovations, debt consolidation, or a big-ticket purchase can feel incredibly rewarding. Personal loans often serve as the bridge to make these aspirations a reality, but they can come with the commitment of ongoing repayments.
If you’re in a position to pay off your loan early, you might be wondering, can you repay a personal loan early? At Handy Finance, the answer is yes. In this guide, we’ll explore how early repayment works, its benefits and drawbacks, and how Handy Finance makes it straightforward with $0 early repayment fees.
Early repayment: A possibility?
Early repayment means paying off the full remaining balance of your personal loan before the scheduled end date. Many lenders can allow it, but it’s important to understand the terms and conditions, as some charge fees for early repayment.
At Handy Finance, we prioritise flexibility and fairness for our customers, offering $0 early repayment fees. This means you can repay your loan ahead of time, whenever you choose, without worrying about additional costs.
Pros and cons of early repayment
Pros of early repayment
- Save on interest: By repaying your loan early, you can reduce the total amount of interest paid over the loan term, saving money in the long run.
- Become debt-free faster: Early repayment can eliminate the financial obligation, giving you peace of mind to focus on other financial goals.
- Boost financial health: Clearing a loan early indicates financial discipline and can improve your overall financial standing.
Cons of early repayment
- Early repayment fees: Some lenders charge fees for early repayment, which could offset your savings. With Handy Finance, however, there are no early repayment fees to worry about.
- Missed investment opportunities: Using extra funds for repayment might mean missing out on investment opportunities that could yield higher returns over time.
- Reduced liquidity: Paying a large sum to clear the loan could deplete your savings or emergency fund, which may leave you less financially flexible for unforeseen expenses.
- Loss of credit-building opportunity: If you’re building credit, consistently making on-time loan repayments over the full term can help strengthen your credit history.
Making early repayment happen
If you’ve decided early repayment is the right move, here’s how you could make it happen:
- Contact your lender: Reach out to your lender to inquire about the early repayment process and confirm there are no fees or penalties. Handy Finance makes this step easy with a transparent policy of no early repayment fees.
- Prepare the full balance: Ensure you have the remaining loan balance available. It’s often prudent to use any windfalls, bonuses, or savings to cover the amount to avoid compromising your savings.
- Consider partial early repayment: If full repayment isn’t feasible, consider increasing your regular repayments. Many lenders, including Handy Finance, may allow you to pay more than the minimum to accelerate debt repayment without committing to full early repayment.
Ready to get ahead with your loan?
Repaying a personal loan early could be a smart strategy for saving on interest and clearing your debt faster. However, it’s essential to weigh the benefits against potential drawbacks, such as reduced liquidity or missed investment opportunities.
With Handy Finance, early repayment is straightforward and stress-free thanks to $0 early repayment fees. By carefully considering your financial goals and lender terms, you can make an informed decision that aligns with your needs.
Approvals are subject to Handy Finance’s credit criteria and responsible lending requirements. Fees, charges, terms and conditions apply. Finance provided to approved applicants by OurMoneyMarket Lending Pty Ltd ABN 64 605 231 669, trading as ‘Handy Finance’ holds Australian Credit Licence number 488228 and is a member of the Australian Financial Complaints Authority (AFCA). The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, we recommend that you consider whether it is appropriate for your circumstances. We recommend you obtain independent advice before acting on any information in this article.
