Early settlement: paying a loan off sooner

Early settlement, in plain terms

Early settlement is paying a loan off in full before its scheduled repayment date. To do it, ask the creditor for a settlement quotation for the exact date you intend to pay. That amount may differ from the scheduled total, and it is not the scheduled total minus a few days of interest, so do not work it out yourself from an old estimate. A settlement quotation is valid only through the date stated on it: if your payment date moves, ask for a fresh figure. Paying the quoted amount does not by itself close the agreement — ask the creditor to confirm receipt, allocation and any remaining balance, and then request a paid-up letter as written proof of closure.

What should the settlement quotation show?

1. The creditor and your agreement reference.
2. The amount required to settle the loan.
3. The date through which that amount is valid.
4. The verified bank details and payment reference.
5. What will happen to any debit order already scheduled.

If the payment date changes

Ask for an updated quotation. A figure calculated for one date may no longer settle the balance on another date, and a debit order arranged through DebiCheck may still run unless the creditor confirms otherwise.

After you have paid

Keep your proof of payment. Ask the creditor to confirm receipt, allocation and any remaining balance. A transfer receipt alone does not confirm that an agreement is closed.

This website cannot issue a settlement quote for a real loan; contact the creditor named in your agreement for a figure that applies to your account. See how the scheduled cost is built.

Reference: National Credit Act — South African Government.