Additional Repayments

Additional repayments are payments you make above the minimum monthly requirement on a loan. It is commonly used to reduce the term of the loan or lower the monthly repayments. Most home and personal loans allow you to make additional repayments, although some lenders place a limit on additional amounts or charge an Early Repayment fee. Additional repayments are credited directly against the principal loan amount, which lowers the monthly interest rates. By making additional repayments, you can reduce your expenses on accrued interest and pay off your loan sooner.