A car loan can be a great way to finance the repair or purchase of your car. Banks offer you financing for a few thousand euros, repayable over several years, and the rates of which may vary from one profile to another. But if you have the opportunity to do so, know that you can terminate your loan before the time, under certain conditions. Back to what you need to know about terminating a credit agreement.
Take advantage of your cooling off period
To terminate your car loan easily and without penalty, the best solution is to take advantage of the withdrawal period. Now, banks, both online and traditional institutions, must now respect these 14 days, before releasing the funds requested by the borrower as part of a car loan.
The withdrawal period runs from the day the credit agreement is signed. It is used to allow borrowers to change their minds about their loan if they find it cheaper elsewhere. To change your mind during this period of time, you simply have to return a coupon fixed in the contract and which you must complete.
Prepayment of your loan
But if you plan to terminate your car loan contract, once the withdrawal period has passed, the accountant Saint-Gilles will advise you to prepay it. It is one of your strictest rights as a borrower. The banks cannot refuse it.
Be careful, however, the early repayment of a car loan is done with penalties that are set as a percentage according to the capital you plan to pay. Indeed, it is not mandatory to carry out early collection of all remaining debt. You can very well terminate only part of the loan. However, be careful, the debt will always hold you until it is fully paid.
Cancel your loan at any time
Unlike auto credit insurance contracts, the termination of the loan itself can be done at any time of the year. There is no need to wait until the anniversary date of your contract to apply.
To terminate your auto loan contract, in order to take advantage of lower monthly payments and reduce the risk of over-indebtedness, you can resort to a loan buyback. Your Saint-Gilles accountant can help you with this. This is another banking benefit that allows you to revise the terms of your loan downwards for a little more comfort in repaying the debt. The repurchase of credit is simply to ask for the capital you need to cover the debt and the prepayment indemnities from another lender. In exchange for his help, you will owe him new monthly payments, which will be much more interesting. Please note, credits reimbursed at 60% minimum are the only ones to be eligible for a credit buyback.
The documents needed to terminate your car loan
But how do you terminate your car loan? What document do you need?
In fact, you don’t need to complicate things to pay off your debt. All you need is a termination request which you must send to your bank. If it is a digital establishment, you can apply with a few clicks on their platforms.
You must also pay the rest of the principal along with the rates as well as the prepayment penalties. Be careful, during this kind of process, not all banks can demand payment of all the missed interest. These are replaced by the termination fees. If you pay the rest of the principal and interest out of your own pocket, some online banks can save you from prepayment penalties.