Early Repayment Penalty

Compensation for early loan repayment.

If a borrower repays a loan with a fixed interest period early, the bank may demand an early repayment penalty for the lost interest. Its amount is limited by law and can be reviewed; calculation errors do occur.

The relevant statutes

§ 502 BGB

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Related terms

Consumer Loan
Installment Loan

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General explanation for self-help, not legal advice (RDG). Individual cases may differ: if in doubt, contact a consumer advice center or a lawyer.