The moment when they will repay the last installment of the loan is something that every Croat dreams of. This is especially true for those who have long-term home loans. Facilitating that real estate is finally theirs is invaluable. And that is why they are able to decide to repay the loan even ahead of time.
However, banks do not look favorably on early repayment of the loan. The sooner a customer repays a loan, the less money they have for the bank. Thus, early repayment of the loan means less interest and a lower cash inflow. The banks, of course, do not want to give up so they were fined by the client with penalties for early repayment of the loan.
Early repayment of a loan: What are the legal regulations?
Up until the last ten years, banks have been regularly charging penalties and various fees for early repayment of loans. Things changed in 2010 when fees for consumer loans were limited. The loans they raised until 2010 had no restrictions on penalties, and everyone raised after that had a limit. This is especially true for floating rate loans. All such loans were not allowed to collect early repayment penalties.
Housing loans that Croats are most likely to decide on belong to a special category. Until last year, banks, at their discretion, charged fees for early repayment of loans, but for all loans made after October 20, 2017, they are not entitled to penalty payments. But numerous testimonials of dissatisfied clients show otherwise.
Many complained that banks were trying to collect their loan early, even though there was no legal basis for it. The fees were the highest for home loans and amounted to up to several percent of the total loan amount, which made clients know to forego early loan repayment because regular payment was a cheaper option.
The pitfalls lie in the small letters of the credit agreement
Although the regulations are in place, before you decide to close and repay the loan early, it is best to revisit the loan agreement you signed. The details are hidden in small letters, and if you may not be all clear, try to find the help of a financial or legal professional. There is always a possibility that the bank will charge you a fee, so it should be seen whether it is worth paying more in monthly installments or paying a fee and closing all debts.
Early repayment of a short-term loan
Until recently, the banks’ monopoly was shaky, as evidenced by a judgment in favor of a customer who sued a bank for payment of early repayment fees. Many Croats have therefore encouraged themselves and are trying to close their loans ahead of time. Increasingly, they take out non-purpose home loan loans to close their home loan. This is more worthwhile because the interest rate is only slightly higher, but the repayment period is much shorter.
This does not check the creditworthiness of the client, but makes sure that the client has regular income and regularly settles all his debts. Usually loans and loans can be accessed exclusively online. This saves time and energy for essential things. Money lending is approved as soon as possible if the documentation required by the credit home is complete. The payment deadline ranges from 15 minutes to 24 hours from the date of application.