Can you pay off your personal loan early?

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By choosing to pay off your loan early, you can often save a good chunk of money that would’ve been wasted on interest. However, some lenders charge steep prepayment penalties that may make early payoff an expensive prospect.

What are the benefits of paying off a personal loan early?

• Save on interest. Beyond no longer having to budget for monthly payments, paying your loan off early will save you hundreds, sometimes thousands, of dollars in interest over the long run.
• Access more cash. Without having to budget for your monthly repayments, you’ll have more money available each time your paycheck comes in.
• Qualify for another loan.If you need to take out another loan, paying off your current loan early lowers your debt-to-income ratio, helping you qualify for more favorable rates and terms. Many lenders don’t allow you to have multiple loans at once.

Watch out for prepayment penalties

Choosing to pay your loan early will result in paying less interest over the life of the loan, but you may face steep prepayment penalties or exit fees if you aren’t careful when picking your loan terms.

Paying these charges may be worth it if your monthly payments are high and you can afford to pay the whole balance back at once. If you can’t, there are steps you can take to reduce the total amount you owe.

3 lenders https://availableloan.net/loans/short-term/ that offer personal loans with no prepayment penalty

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