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Can you repay your personal loan early?

What you need to know before you close out your loan ahead of schedule.

Updated

Fact checked
Repaying your loan before the scheduled due date is a great goal to have. You will pay less interest than is set out in your loan contract and you may save annual or monthly fees as well. However, it's important to work out whether you are able to repay your loan early without being charged prepayment penalties. This guide will take you through how to check whether you will be charged prepayment penalties and how to work out if you'll actually save by paying your loan off ahead of schedule.

Can I repay my personal loan early?

You are able to repay a personal loan whenever you want, even if that is ahead of schedule. However, many people choose not to do this because of early repayment penalties. Lenders charge these "penalties" to deter people from closing their loans early. Penalties are not charged on every personal loan, usually only on fixed rate personal loans, but you need to be sure that closing your personal loan early will not cost you more in penalties than you will save in interest.

What do I need to do before I repay my personal loan ahead of schedule?

Before you decide to close your personal loan ahead of schedule, here is what to do:

  • Check your loan contract for early repayment fees. All fees that apply to your loan will be set in your loan contract and these include any fees you will be charged if you close your personal loan early. Look for "early repayment penalty" or "early repayment fee".
  • Confirm with your lender. Even if you have checked in your contract, get in contact with your lender and confirm what you will be charged for repaying your loan early. Ask for the total payout cost of the loan and get your lender to spell out what early repayment fees are included. If you do this over the phone, ask for the information emailed to you so you have it in writing.

How do you actually pay out your personal loan early?

The process differs between lenders, but you will generally start by getting in contact with your lender. It will give you the total payout figure. Then the lender will either direct debit that amount from your account the same way it takes repayments from your accounts or it will provide you with details of how to make the payment.

After the payment has been made you need to check that the loan account has been closed. This may take a little bit of time but it's important to confirm. You can also check your credit report to see that it's been updated with the new account information and see if your credit score has been affected. You can check both your credit score and report for free on finder.

Which lenders will let you repay your personal loan early?

Check the following table to see what early repayment fees and charges apply to different personal loans.

LenderPersonal loanEarly repayment feeReview the loan
ANZFixed Rate Personal Loan$300Review
ANZVariable Rate Personal Loan$0Review
Bank AustraliaLifestyle Personal Loan$0Review
Bank AustraliaPersonal Loan – Property Owner$0Review
Bank of MelbourneUnsecured Variable Rate Personal Loan
  • $150 if you repay in the first 12 months of the loan term
  • $100 if you repay early after the first 12 months of the loan term
Review
Bank of MelbourneUnsecured Fixed Rate Personal Loan
  • $150 if you repay in the first 12 months of the loan term
  • $100 if you repay early after the first 12 months of the loan term
  • Break costs also apply
Review
BankSAUnsecured Variable Rate Personal Loan
  • $150 if you repay in the first 12 months of the loan term
  • $100 if you repay early after the first 12 months of the loan term
Review
BankSAUnsecured Fixed Rate Personal Loan
  • $150 if you repay in the first 12 months of the loan term
  • $100 if you repay early after the first 12 months
  • Break costs also apply
Review
BankwestUnsecured Personal Loan
  • $250 if you repay within the first 12 months
  • $100 if you repay in 13–24 months
Review
BankwestFlexible Personal Loan$0Review
bcuSecured Freedom Personal Loan$0Review
bcuUnsecured Freedom Personal Loan$0Review
Bendigo BankUnsecured Personal Loan$20Review
BOQUnsecured Fixed Personal Loan$0Review
CitiPersonal Loan Plus$0Review
Commonwealth BankFixed Rate Personal LoanAn early repayment adjustment may applyReview
Commonwealth BankVariable Rate Personal Loan$0Review
CUAUnsecured Variable Personal Loan$0Review
CUAUnsecured Fixed Personal Loan$0Review
GatewayPersonal Loan – Fixed Rate$0Review
GatewayPersonal Loan – Variable Rate$0Review
HarmoneyUnsecured Personal Loan$0Review
HSBCPersonal Loan$199 (doesn't apply in the last 6 months of the loan term)Review
IMBSecured Personal Loan$0Review
IMBUnsecured Personal Loan$0Review
INGPersonal Loan$0Review
LatitudePersonal Loan (Unsecured)$300 if you repay in the first half of your loan termReview
LatitudePersonal Loan (Secured)$300 if you repay in the first half of your loan termReview
MEPersonal Loan$0Review
MoneyPlacePersonal Loan$0Review
MyState BankUnsecured Personal Loan$0Review
MyState BankSecured Personal Loan$0Review
NABUnsecured Variable Rate$0Review
NABUnsecured Fixed Rate$0Review
NOW FINANCEPersonal Loan
  • $175 if you repay in the first 6 months
  • if you repay in the first 6–12 months
  • No fee if you pay after the first 12 months
Review
People's ChoiceUnsecured Personal Loan$0Review
Pepper MoneyUnsecured Personal Loan – Fixed$0Review
Pepper MoneyUnsecured Personal Loan – Variable$0Review
PlentiPersonal Loan$0Review
RACQ BankUnsecured Personal Loan$0Review
RACVPersonal Loan2% of remaining balance or $205Review
SocietyOnePersonal Loan$0Review
St.GeorgeUnsecured Personal Loan – Variable Rate
  • $150 if you repay in the first 12 months
  • $100 if you repay after the first 12 months and before the end of the loan term
  • Break costs may apply
Review
St.GeorgeUnsecured Personal Loan – Fixed Rate
  • $150 if you repay in the first 12 months
  • $100 if you repay after the first 12 months but before the end of the loan term
Review
WestpacUnsecured Personal Loan$175 if your loan term is over 2 years and you repay it within 2 years. Fee waived if you refinance to another Westpac personal loan.Review

 

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Personal Loan Offers

Important Information*
Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 25.69% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.

Logo for NAB Personal Loan Unsecured Fixed
NAB Personal Loan Unsecured Fixed

You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.

Logo for SocietyOne Unsecured Personal Loan
SocietyOne Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 20.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

Logo for Pepper Money Unsecured Fixed Rate Personal Loan
Pepper Money Unsecured Fixed Rate Personal Loan

You'll receive a fixed rate between 6.95% p.a. and 17.95% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Make additional repayments or pay off the loan early, penalty-free.

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