What Is an Early Repayment Fee?
Definition
Early Repayment Fee: A fee a bank may charge when a loan is paid off before its term. It is usually a percentage of the principal paid early, and consumer law may cap it or ban it for some loan types.
An early repayment fee is a fee a bank may charge when a loan is paid off before the end of its term. It is usually a percentage of the principal paid early, and consumer law often caps it or bans it for some loan types. The payoff amount is the remaining principal plus the fee.
Where it appears in the formulas
fee = min(principal paid early × fee rate; interest discount): the fee is capped at the interest the borrower saves on the remaining installments. The payoff is remaining principal + fee. The early repayment calculator applies the legal maximum fee rate.
In Türkiye
Under Türkiye’s Consumer Protection Law no. 6502, consumer loans (personal, vehicle) carry no early repayment fee. On a fixed-rate housing loan it is at most 1% of the principal paid early when 36 months or less remain, 2% otherwise, and it cannot exceed the interest discount (Law 6502, art. 37/2). Variable-rate housing loans carry no fee.