No penalties for early repayment of revolving credit
According to the Consumer Code, and more particularly Article L. 311-21, the early repayment of the revolving credit is authorized and entails no penalties on the part of the lending credit institution.
Unlike some credits, it is impossible to claim financial expenses when you want to make partial or total prepayment.
It should be noted however that these prepayments are limited in the year according to the regulations of the financial institution chosen.
Early repayment of revolving credit: a good financial operation
Early repayment of the revolving credit can save money and decrease the total loan amount. In fact, when the latter is partial, it makes it possible to reduce the amount of the starting capital and thus to reduce the interest.
After a partial early repayment, the duration of the credit or the amount of the monthly payments are revised downward to rebalance the remaining amount due.
How to make an early repayment of a revolving credit?
It’s easy to make an early repayment of the revolving credit . For this, it is sufficient to inform his financial lender with a registered letter with acknowledgment of receipt.
This letter must specify the client and contract number of the borrower and warn of the desire to make a refund. The amount must also be specified, as well as the date from which the borrower wishes to make repayment in the case of a levy. It is also possible to make a prepayment by sending a check by mail.
Note that it must be sent at least two weeks before the due date for it to be taken into account.
Early repayment of revolving credit to close the contract
Early repayment of the revolving credit may allow the borrower to terminate his contract. To do this, all that is required is to make a full refund of the outstanding sums owed to the lending institution and to specify its desire to close the current revolving credit. Read also Closing a revolving credit Once the mail is sent, it takes several weeks before the refund is taken into account, as the closure of the loan. It should be noted that the financial institution must send a chronology of operations, as well as an account statement indicating the definitive closure of the revolving credit.