LOANS IN PROGRESS
Part payment and payoff
The customer has money in hand and asks: what if I close it now? The answer comes from the outstanding principal and the interest refunded, not from the number of instalments left.
What the early repayment rebate is
Closing a loan early means the interest on periods not yet run is not collected, and taxes charged in advance are refunded in the same proportion. The payoff figure is the outstanding principal less that rebate.
Does a part payment cut the term or the instalment
Either is possible and the results differ: keeping the term and lowering the instalment saves less interest than keeping the instalment and shortening the term. Bankacı produces the remaining plan after the payment.
Frequently asked
Why is the payoff not the sum of the remaining instalments?
Those instalments still contain interest for periods that have not run. On payoff that interest is not collected, so the payoff figure is always lower.
Is there compensation on a mortgage?
A fixed-rate mortgage can carry early repayment compensation on the outstanding principal. In the transfer calculation this is a separate field.
See also: Personal, vehicle and housing loan calculations · Mortgage refinancing · Glossary
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