Comments on: In Massachusetts is it legal to pay off a loan without penalty? http://01243.com/blog/in-massachusetts-is-it-legal-to-pay-off-a-loan-without-penalty/ 01243.com Mon, 23 Aug 2010 16:08:14 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: sophist http://01243.com/blog/in-massachusetts-is-it-legal-to-pay-off-a-loan-without-penalty/comment-page-1/#comment-426 sophist Thu, 27 Aug 2009 15:38:53 +0000 http://01243.com/blog/in-massachusetts-is-it-legal-to-pay-off-a-loan-without-penalty/#comment-426 Not if it is not specifically prohibited by the contract. If there is nothing in the contract pertaining to early payout, then you must be allowed to pay it off and corresponding interest repaid to you. Not if it is not specifically prohibited by the contract. If there is nothing in the contract pertaining to early payout, then you must be allowed to pay it off and corresponding interest repaid to you.

]]> By: open4one http://01243.com/blog/in-massachusetts-is-it-legal-to-pay-off-a-loan-without-penalty/comment-page-1/#comment-425 open4one Wed, 26 Aug 2009 11:55:06 +0000 http://01243.com/blog/in-massachusetts-is-it-legal-to-pay-off-a-loan-without-penalty/#comment-425 You have to read the loan document, but basically you only owe the Principal amount of the loan, plus interest up to the current date, plus any applicable Prepayment Penalty. You do not owe them interest for the entire life of the loan if you pay early under any circumstances whatsoever. It is POSSIBLE that the interest for the current date is for an entire month, meaning if you pay off today, you pay through Dec 31, but that would be it. You don't owe January. Prepayment penalties vary, and must be specified in the loan document itself. Most are phrased something like "if you pay off more than 20% of the original Principal amount during any 12 month period, you will pay a penalty of six months interest on the amount over 20%." You have to read the loan document, but basically you only owe the Principal amount of the loan, plus interest up to the current date, plus any applicable Prepayment Penalty.

You do not owe them interest for the entire life of the loan if you pay early under any circumstances whatsoever.

It is POSSIBLE that the interest for the current date is for an entire month, meaning if you pay off today, you pay through Dec 31, but that would be it. You don’t owe January.

Prepayment penalties vary, and must be specified in the loan document itself. Most are phrased something like “if you pay off more than 20% of the original Principal amount during any 12 month period, you will pay a penalty of six months interest on the amount over 20%.”

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