Escape Fees with Installment Loans Prepayment Penalty-Free
The Cost-Saving Advantage of Prepayment Penalty-Free Loans
Prepayment penalties are fees lenders charge when a borrower pays off their loan before the agreed-upon term ends. These penalties are designed to compensate lenders for the interest they lose when a loan is paid off early. However, loans without such penalties provide borrowers the freedom to settle their debts sooner, potentially saving a significant amount on interest payments. For instance, if you have a $10,000 loan at a 5% interest rate over five years, paying it off two years early could save you nearly $500 in interest1.