Early Repayment Charge

How early repayment charge works

The amount and calculation can depend on the product, settlement date, remaining term and notice requirements. A lender’s settlement figure should identify the sum required to discharge the commitment on the stated date.

Practical UK business example

A business considers refinancing a loan after eighteen months. It requests a settlement quotation before comparing savings with the fees and costs of replacement finance.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

It can materially affect whether refinancing or paying from surplus cash is economically worthwhile.

Limitations and common misconceptions

It is unsafe to assume every commercial agreement allows free early repayment or follows consumer-credit rebate rules. Charges and rights depend on the contract and applicable law.

Discuss business borrowing to discuss how the structure relates to your business.