Prepayment of the instalments for the purchase of vehicles is feasible。
Specific steps for early repayment include making a written application to the bank, which is usually required between one week and one month before the repayment date. The regulations may vary from banks requiring about half a month to 15 days。
In the case of early repayment, an identification card and a loan contract are required, and the amount due is deposited in an account where the principal of the loan is withheld, which is automatically withheld by the bank。
There is no limit on the number of early repayments, which can be fully or partially repaid, but the threshold for each repayment varies from bank to bank. Some banks set a minimum repayment amount of $10,000 or several times, while others allowed partial payment in thousands of dollars。
A number of key factors need to be considered before deciding on early repayments. If the duration of the loan is less than one year, banks and automobile finance companies will charge a percentage of default money, usually between 5 and 8 per cent of the remaining loan amount. This would lead to an increase in the overall cost of the loan, and therefore there would be no need for an advance repayment in the case of a loan period of less than one year。
If the duration of the loan exceeds one year, consideration is given to early repayments that require a comprehensive assessment of their economic situation, the terms of the loan contract and market interest rates. For example, an early repayment would be more economical if the loan was at a higher rate of interest and at an early stage of repayment, with the ability to repay in a one-time or partial manner. However, if the interest rate on the loan has already benefited from a discount, early repayment may not be economical。
In the case of early repayment, attention is also drawn to specific bank provisions, such as the time limit for repayment, the collection of default payments, etc. Normally, an advance payment requires a written or telephone request in advance and the bank approval process may take about one month. Different banks have different requirements, such as limitations on the amount of early repayment and the collection of liquidated damages. The full amount of the funds will need to be deposited in the bank after the balance of the loan is calculated。
