Many businesses want to know whether clearing a facility early reduces the total cost or whether a charge applies for doing so. The honest answer is that it depends on the terms of your specific agreement, so the right place to look is your offer documentation and a current settlement figure.
What your agreement tells you
Your agreement sets out how interest and any charges are calculated. For some structures, settling early reduces the interest you would otherwise pay over the remaining term. For others, the cost may be largely fixed regardless of when you pay. We do not quote a generic number here because only your own documents are authoritative for your facility.
The clearest way to compare
- Request a settlement figure for the date you could realistically pay.
- Compare it against the total of the payments you would otherwise make to the end of the term.
- The difference shows whether early settlement saves your company money.
If anything is unclear
Your account team can walk you through how the figure was built so you can make an informed decision. There is no obligation to proceed once you have a quote.
Credicorp lends only to UK limited companies and LLPs for business purposes, outside the FCA consumer-credit regime.
See also: How to compare early repayment terms across lenders, What is an early repayment charge (ERC)?, How does early settlement work?.