Early repayment fee
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An early repayment fee is what a lender may charge when you repay all or part of a loan before the term ends, commonly a percentage of the principal still owed, or a fixed sum. Some lenders ask for notice, and some charge only in the first part of the term. Whether a fee applies and how it is worked out is set by the loan documents.
Example
Suppose HK$60,000 of principal is still owed and the early repayment fee is 2% of it.
- Principal still owed
- HK$60,000
- Early repayment fee 2%
- HK$1,200
Whether repaying early pays off depends on comparing this HK$1,200 with the interest it saves.
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This page is information, not investment, lending or tax advice.