Definition · Glossary
Early repayment charge
Personal LoansBudgeting & Money Management
In plain English
An early repayment charge (ERC) is a fee some lenders charge if you repay a loan before the agreed term ends. It typically equals one to two months' interest.
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Example
Repaying a personal loan six months early triggers an ERC of £180, equivalent to two months' interest.
Don't get caught out
Common misunderstandings
- Not all lenders charge an ERC — check the terms before applying if you might want to repay early.