Finance

Question: Will i have to be paying the full finance charges even if i pay off early ?

(Posted by: Johnpau2011 on 2009-06-30 10:02:50)

Lets say I buy a home with a loan of 100K and the finance charges are 50K for 15year fixed rate. So at the end of 15 years I would have paid the lender 150K in total. Now If I pay of the loan early in 10years then will I be paying his 50K finance charges along with the 100K loan ? or will I be paying(approximately) = 100K loan + 35K finance chages ?

Posted by: Kris on 2009-06-30, 10:09:01

No you do not pay the full finance charges. (Unless for some weird and random reason that it is written into the note that way which is HIGHLY unlikely.) That 's why it is always extremely beneficial to pay things off early. To save on those huge interest charges.

Posted by: It's ME on 2009-06-30, 10:08:40

You only pay the interest for the time you have the loan outstanding. go to bankrate dot com and research mortgages.

Posted by: septsecret on 2009-06-30, 10:12:52

The real answer is: it depends on the terms of your loan. Frequently, loans have a prepayment penalty which allows the bank to all but guarantee its return to a certain level. Not all loans have this, so you should know the terms of your loan before you sign.