Redemption Charge
A Redemption Fee is a charge made by some loans and mortgages lenders if you pay off your loan before the agreed time.
It is intended to compensate the lender for the loss of interest charged over the full term of the loan, and can be quite a large percentage of your loan.
Redemption charges are most often found in the small print of unsecured loans agreements, and are very common in loans or mortgages that feature a special introductory rate.
If you think you might be in a position to pay off a loan early, you should check whether a redemtion charge will need to be paid, and then judge whether it is worth paying off the loan or sticking to the original term.
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