Requesting a loan is an operation that we can request with relative ease. If there is something that is really motivating, it is being able to cancel a loan early. Either for an economic improvement, or for receiving unforeseen money, canceling a loan is highly recommended.
Here we provide the keys to cancel a loan and how to do it, also the main advantages that you will find when you perform this operation. Do you want to know how to cancel your loan?
Why cancel a loan
Canceling a loan is nothing more than returning all the money you owe to the financial institution at once. It means returning the remaining capital and stop paying the remaining monthly payments. Canceling a loan is an operation that can be carried out at any time. There is an associated cost, generally between 0.5 and 1 percent of the remaining capital,
The cancellation of the loan can occur for various reasons, such as:
- Having raised money to pay the debt. A lottery prize or an unexpected payment can be two of the causes.
- Having found another loan with better conditions. Yes, it is something that always pays off.
How do you cancel a personal loan?
The way to do it is very simple, it will be enough to go to the office of the financial institution and announce that you want to cancel the loan . To do this, you must have entered the total amount in the account associated with said loan, or take the money to the entity so that its staff can enter it and it can be canceled.
In any case, most credit or financial institutions allow cancellation from their own portals, or from online banking applications. It will be enough to have previously made the deposit or transfer and request the cancellation. Normally it is an immediate process , so the credit is automatically canceled. Some entities allow you to carry out the cancellation operation from your internet banking, but the result is not shown until after a few hours.
How much does it cost me to cancel a loan?
It is always cheaper than continuing to pay. If the loan had more than a year left to complete, the early termination fee is 0.5 percent. If the time is less than 12 months, it is 1 percent. These figures can in no case be higher. It will be enough to do a few simple numbers to realize that the savings are always considerable . This is due to the interests of a personal loan, however low they may be, they will never be less than 5 percent in the best of cases. Apart from this commission for early cancellation, a financial institution cannot charge any type of fee or fee for canceling your loan.
The advantages of canceling a loan
Obviously, stop paying interest. With this, you increase the ability to save and free yourself of a financial burden. Loans are effective solutions at certain times, but the best loan is that you do not have to apply.
If you have several loans and you only have money to pay off one of them, you should always pay off the one with the highest interest first. With this, the savings will be greater. If you can save more money, the next one has to be the one with the highest interest again. Simple math, but maximum savings.