PSD-Kiwi wrote: ↑Wed Feb 21, 2024 11:24 am Banks in many countries charge an early repayment fee, or 'break cost', it is a penalty charged if you pay back more than your fixed monthly repayment or pay the whole loan off too early...its a shit policy, you get penalised for early repayment because the bank is losing out on all the potential interest, but it would have been stated in the T&C's of your loan agreement so you shouldn't be surprised.

Kenr wrote: ↑Wed Feb 21, 2024 11:47 am I think it’s more dependent on how long the loan was for and when you decide to pay off in full.

I’ve paid two (2) 5-year vehicle loans off early, between 6-9 months, and was never penalized.

Kenr wrote: ↑Wed Feb 21, 2024 12:06 pm

phuketrichard wrote: ↑Wed Feb 21, 2024 11:57 am

Kenr wrote: ↑Wed Feb 21, 2024 11:47 am I think it’s more dependent on how long the loan was for and when you decide to pay off in full.

I’ve paid two (2) 5-year vehicle loans off early, between 6-9 months, and was never penalized.

5 year loan already paid 3 1/2 years

I know in the U.S. they use compound interest on home/auto loans and the majority of the interest is paid early in the loan, the principal and interest paid is not the same every month. That’s why when I paid those two (2) vehicles off it was mainly principal with very little interest left.

Don’t know how Cambodian banks determine how much of the payment each month goes towards the principal.