LOAN WITH NO EARLY REPAYMENT CHARGE (NON ERC) LOAN WITHOUT EARLY REPAYMENT PENALTY FEE CAR MORTGAGE PERSONAL LOAN WITH NO EARLY REPAYMENT COSTS
A loan without an early repayment penalty (called also Early Repayment Charge or ERC) is by definition a funding facility that is granted and doesn’t require to make a repayment fee to a lender if a borrower pays off a loan before the scheduled term of the credit facility.
A loan with no early repayment fee, also referred to as financing without a redemption penalty applies mainly to three types of loans, car loan, personal loan and mortgage where borrower are entitled to repay their loan earlier without being penalized.
Funding without early repayment charge is feasible in case a borrower opts for this clause before signing a loan agreement as it is possible to include a preference allowing the amount of the early repayment penalty to be raised or reduced after a certain number of instalments.
A loan without early repayment penalty is only possible for a SVR (Standard Variable Rate) mortgage where payments can go up or down according to the variation of interest rates but cannot apply to fixed rates where the lender has committed to maintain the same level of interest rate.