A private loan is, as you can read in other articles here on the site a loan that you take where there is no security. The possible loan amount that you can apply for extends up to USD 350,000.
It is a bit different how much the different lenders individually offer their customers to borrow, but up to this sum there are also several options.
The loan has an interest rate
That is constantly variable and it is something that is positive for you who are thinking about solving your private loan early. Because it is true that fixed-rate loans cannot be settled prematurely without having to pay something called interest-rate compensation. Since a private loan that said was not tied, this is no obstacle and thus you can redeem the loan at any time without costing anything extra.
The fact that the loan has no collateral is also positive when it comes to redeeming the loan. This simply means that there is no requirement that you solve it if you sell a certain thing.
For example, you cannot sell a house and use money to pay off other loans if you have a mortgage. The money isf going first to repay the mortgage and then the surplus can be used for other loans. When it comes to private loans, you never have to think this way. If there is money, you can redeem the loan.
Pay the most expensive first
This is a classic tip for those looking to settle loans early. If you have several loans, it is important to settle the most expensive ones first as this will save the most money. Sometimes it is not possible to solve the most expensive but if possible go this route. When it comes to private loans, the small loans are usually the ones that cost the most and thus most important to solve.
Also, remember that there is nothing that says you have to repay the entire loan at the same time, but you can make a down payment if you wish. Therefore, it is normally better, for example, to repay a small sum on an expensive loan than it is to settle the entire debt on a loan with a low interest rate.
How to settle a private loan early
What you should do if you want to pay off the loan before it is normally planned is to simply contact those you borrowed the money from.
They will then give you instructions on exactly how to get rid of the loan. Usually, it is quite simple as you just have to make a payment to them correctly according to their way of working.