It is very important that before contracting any type of loans, including personal ones, a detailed reading of the contract must be signed to obtain the credit, since it contains all of your rights and obligations that can be assumed and can be located in a special section in which are detailed the conditions established for the cases in which it is wanted to advance installments or directly cancel the debt in advance, because, according to the entity, it is possible that they charge a commission for doing it or that penalize it or allow it without any additional cost.
What is the early cancellation of a payday loan?
Suppose you acquire a payday loan for an amount of 100 thousand pesos to pay in three years and that has been canceled and half of it including interest. Now, after almost two years for some reason such as the sale of a car or house or a salary improvement, you have the amount of money that is needed to finish paying the credit and you decide to give those funds that profit by paying in the corresponding entity the amount equivalent to the missing quotas. This is an early cancellation that can always be done, but in some cases it will involve an additional cost and in others it will not, as we will see below.
Do banks apply a commission for the early cancellation of a payday loan?
As we said, some banks establish a penalty for those who want to cancel the loan early and this depends on each entity.
For example, if you apply for a loan in Banco Galicia and decide to cancel after having paid twenty-five percent of it you will not have any commission, however, if you decide to do it before, the bank will charge a commission equivalent to three percent of the amount total loan plus VAT. This condition is repeated for HSBC Bank, since this penalty is established by law, however, there are banks that can charge lower fees as part of a strategy to attract customers from offering competitive advantages.
Do I need to advance fees on a UVA credit?
As the UVA credits are tied to inflation, a variable that since we left the convertibility has become a relevant issue and that in recent years is increasing, it can be deduced, in principle, that advance quotas with the objective of shortening the duration of the loan is a good strategy to safeguard against the variations of this factor that directly influences this type of financing. But of course, because of the policies that the Fury Bank is carrying out, inflation is falling, which benefits those who acquired a UVA credit. Therefore, we advise you to bear in mind the following:
The projections of low inflation that is already taking place in our country. Here it will be for consideration of the debtor if it considers that the inflationary indices for the rest of the loan will go down or up
It is important to know if the bank stipulates any fee for the advance of fees. As an example, we will say that the City and Province do apply commissions while El Nación does not.
If I pay a credit ahead of time, do they discount interest?
From what the law establishes, we can say that who pays a credit before time will have the right to access a proportional reduction of the interest that in practice means that at the time of cancellation only the remaining capital will be taken. This means that the bank will receive less money than it had projected when the agreement with the client occurred and that is why it often applies a penalty in order to reduce the loss.
Should you cancel early on a payday loan?
As always when it comes to financial products, it is necessary to take into account more than one variable before making a decision. In this case it has much to do with the type of loan that was hired, because, if this is a fixed rate, looking at the macroeconomic characteristics of our country in which the shares are liquefied at the rate of inflation it may be convenient to keep the loan and allocate that money to a profitable investment such as a fixed term, start a business, buy a durable good, etc. Now, if we talk about a variable rate loan or UVA, it might be better to think about an early cancellation to avoid the risks of economic swings.
Which entities do not charge commission for an advance payment?
According to the regulations issued by the Fury Bank, banks will not charge commissions for early cancellations after a quarter of the loan has been paid, so that most entities will charge if necessary with cancellation before the stipulated minimum.
Our research shows that in the web loans segment the non-payment of fees for early cancellations is much more common as it appears in the terms and conditions of Afluenta, one of the most important online loan platforms at a continental level. It was founded in Argentina.
Should a payday loan be canceled early? And advance fees?
What is it?
It is the possibility for those who took a loan to pay the entire amount before the stipulated date or to advance installments in order to shorten the duration of the loan.
How does it work?
Simply the user notifies the company that it will proceed with the early cancellation or advance of installments and pay by the corresponding means.
What to keep in mind?
It is important to bear in mind that most of the entities apply commissions close to three percent for advancing payments or making. anticipated total cancellations.
Finishing with the theme of the day, we will say that you should carefully analyze what are the advantages and disadvantages of making early cancellations or advances of fees, then, in this way you can make the most of your money.
I do not want to say goodbye without telling you about our online credit simulator with which you can compare the personal financing alternatives offered by the most renowned banks that work in our country.