How to Make an Early Loan Repayment

The faster you return borrowed funds to a bank, microfinance institution (MFI), or another lender, the less interest you pay. You have the right to make additional payments beyond the schedule specified in your loan agreement. Such extra payments reduce the principal debt and lower the total overpayment. However, it is important to properly organize early repayment. Here’s how.

Can You Refuse a Loan if You Change Your Mind?

If the bank or another financial institution has approved your loan but has not yet transferred the funds, you can refuse it without any consequences — simply do not sign the agreement.

After signing the agreement and receiving the funds, the lender starts charging interest. Therefore, for early repayment, you must pay both the principal and the interest accrued for the period you used the funds.

If only a short time has passed since signing the agreement, you can repay the loan without prior notice. This is allowed during the so-called “cooling-off period,” which depends on the loan type:

• 14 days — for consumer loans that can be used for any purpose
• 30 days — for targeted loans, such as car loans

Some institutions may set a longer period in the agreement. If this period has already expired, you must submit a request for full or partial early repayment.

Why Notify the Lender About an Early Payment?

Banks and MFIs withdraw funds strictly according to the payment schedule. Simply transferring extra money does not automatically reduce the debt.

By law, you must notify the lender about an early payment at least 30 calendar days before making it. However, many institutions accept payments earlier — for example, on the next scheduled date.

You can submit an early repayment request through a mobile app, online account, or at a branch. Check the exact procedure in your agreement or by calling the hotline.

The next steps depend on whether you want to make a partial repayment or fully close the loan.

If You Plan to Make a Partial Repayment

The lender must accept any amount exceeding the required payment. You can choose to:

• Reduce the loan term
• Lower the amount of future monthly payments

Within three days after the extra payment is withdrawn, the bank or MFI must provide a new payment schedule reflecting the updated amounts but keeping the dates unchanged.

For example, if regular payments are due on the 10th of each month and you made an extra payment on the 3rd, the scheduled payment on the 10th is still required.

If You Want to Fully Repay the Loan

• After submitting the request, the lender will calculate the exact amount due on the date you specify within five days.
• Top up the account from which payments are usually withdrawn. If there are insufficient funds, the request will be canceled and must be resubmitted. If you transfer less than the full amount, the payment will count as partial repayment, and a new schedule will be issued.

How to Confirm the Loan is Fully Repaid

After full repayment, obtain a certificate from the bank or MFI confirming that the debt is cleared and the loan agreement is closed. This protects you from possible mistakes or misunderstandings in the future.