Special repayments are unscheduled payments to reduce the remaining debt on a loan

Unless otherwise agreed in the contractual terms, additional payments may result in costs for the customer. Nevertheless, it can be worthwhile for borrowers to make special repayments. This article shows when this is the case and what consumers have to consider.

Definition: What is a special repayment?

Definition: What is a special repayment?

With special repayments, borrowers reduce the residual debt of a loan. You have the option of making additional payments to the bank once or regularly, regardless of your installments. These amounts count towards the repayment of the loan, which reduces the remaining debt. This results in a double effect for annuity loans and special repayments:

  • The term of the loan is shortened.
  • The interest burden drops.

In the case of annuity loans, the installments consist of a repayment component and an interest component. Since the monthly installments remain the same over the entire term until the debt is settled, payments are not required due to the special repayment. Thus, the borrowers save the interest portion of the missing installments.

With a classic installment loan, additional payments are not provided as standard. Nevertheless, many lenders offer their customers the opportunity. This option is used by consumers when they receive capital, whether planned or unplanned, for example from insurance, special benefits such as vacation and Christmas bonuses or through an inheritance.

As a rule, special repayments are subject to one of the following conditions:

  • Special repayment right between five and ten percent of the net loan amount per year
  • Maximum annual amount in USD (1,000 USD, 2,000 USD,)
  • Total maximum amount in percent, for example a maximum of 20 percent of the net loan amount during the entire term

Calculate special repayment (with example)

Calculate special repayment (with example)

To be able to calculate the effects of the special repayment, a repayment plan is necessary. Customers receive this when completing their loan. As a rule, no special repayments are taken into account without an express customer request. An example:

  • Loan amount: 10,000 USD
  • Borrowing rate: 5.5 percent
  • Term fixed interest period: 5 years
  • Monthly rate: 129.17 USD
  • Remaining debt after the fixed interest period has expired : USD 4,259.93

In this example it can be seen that customers repay their loan with 5,740.07 USD within five years. The interest expense is 2,009.93 USD. At the end of the term, there is a remaining debt of 4,259.93 USD.

Repayment schedule with special repayment

Customers can find various free computers on the Internet that they can use to create their repayment plan with special repayments. To do this, they enter all credit-relevant data and the desired additional payments. Based on the above example and a free annual repayment of 600 USD, your repayment schedule would now look like this:

  • Loan amount: 10,000 USD
  • Borrowing rate: 5.5 percent
  • Term fixed interest period: 5 years
  • Monthly rate: 129.17 USD
  • Remaining debt after the fixed interest period: 901.85 USD
  • Special repayments of 600.00 USD per year

Evaluation of the repayment plan

Looking at this example to calculate the special repayment, it becomes clear what advantages the additional payments have with an annuity loan. Customers not only reduce their residual debt, they also save high interest costs.

In this case, the free special repayments make sense for the borrower due to the interest savings. If the customers paid a higher amount, there would be no remaining debt after the fixed interest period. It would also be possible for them to pay off their loan earlier. There may be a prepayment penalty.

Make a special repayment

In order to make a special repayment, the borrowers must know the amount of the additional payments that are contractually permissible. Some banks set their customers fixed dates on which the special repayment has to flow. If borrowers miss this date, there is no option to make a free payment for the current year.

Many borrowers wonder about the special repayment, how to transfer it. Unless otherwise noted by the banks, the payment will be transferred to the bank account designated for payment in installments. It is advisable to state the note “special repayment” in the booking note. In addition, the contract number and customer number must not be missing, so that the bank correctly allocates the amount.

Tip: Set up a standing order – By setting up a standing order, customers do not miss any of the deadlines set by the banks and can be sure that their additional payment will be carried out automatically.

When does a special repayment make sense and for whom is it worth it?

When does a special repayment make sense and for whom is it worth it?

Special repayment options are not mandatory for customers. If this option has been stipulated in the contract, the borrowers can make additional payments, but do not have to make use of them. For personal loans, many banks offer this option as a standard in their contracts. If the payments are not associated with additional costs, special repayments make sense for customers who want to pay off their loan as quickly as possible.

Especially with larger amounts of money, borrowers have to take into account the so-called opportunity costs. These are amounts that customers will miss if they do not invest the money in capital investments. If the interest rate on the money market is higher, for example for funds or interest products, it is more worthwhile for consumers to invest the amount at good interest rates.

Tip: Savings with low repayments – Special repayments are profitable, especially for borrowers with a low initial repayment. Due to the high interest component in the first few years, the additional payments reduce their interest burden at the beginning of the term.

Costs and fees for special repayments

Costs and fees for special repayments

The banks make a significant difference in terms of the special repayment options. At some institutions, additional payments for small loans are free of charge, at others fees are payable. Customers who are interested in special repayments should therefore check this option when signing the contract. These fees may apply if borrowers make unscheduled payments:

Calculation fees and interest premiums

With low special repayment amounts of up to five percent of the net loan amount, many lenders do not charge fees. However, if customers want to repay more, they have to expect interest surcharges. As a rule, these are between 0.05 and 0.07 percent.

Caution: In the case of construction financing, the interest mark-up for the special repayment option can be significantly higher and up to 0.25 percentage points. With a financing sum of 200,000 USD and a term of 15 years, the loan costs increase considerably:

The inclusion of a special repayment option, especially with real estate loans, is only economical if the borrowers actually make use of it.

Tip: Take the APR into account – The APR gives information about the total cost of a loan, since it contains all the fees. The effective interest rate also includes the additional amount for special repayments. With finance check’s free loan comparison, consumers can easily compare the effective annual interest rate of many banks with each other in order to find the best offer for themselves.

Special repayments can have a negative impact on the tax

The repayment portion of a loan cannot be deducted from tax. This also applies to special repayments, so they are not taken into account by the tax office. However, the interest expense can be tax deductible if the loan is used to generate permanent income. These prerequisites apply to the self-employed who apply for a business loan or a building loan that is used to finance rental apartments.

Special repayments offer the advantage of lowering the interest burden. However, this property can be a disadvantage for people who claim the loan for tax purposes. Due to the reduced interest expenses, the taxable income and thus your tax burden increases.

Special repayments on car loans

Special repayments on car loans

Special repayments on car loans make sense if customers have deposited their vehicle as security. Due to the earlier repayment of the loan, the vehicle registration passes to them more quickly, making them the rightful owner. Additional payments are also worthwhile if the borrowers want to sell the financed vehicle in the next few years and do not get the bank’s approval.

Special repayments for construction finance

As already mentioned, not every bank offers the special repayment free of charge. Especially with home loans. the option is often associated with higher interest rates. Special repayments that are subject to a fee only make sense if customers are guaranteed to make use of them. This is the case, for example, if they expect a large sum of money in the coming years that they will bring in to finance their home.

Despite the additional fees, it can be worthwhile to pay off the construction loan faster than planned. Depending on the amount of the special repayments, borrowers can shorten their financing period by several years. The interest expenses saved as a result can significantly exceed the additional costs. In this case, it is advisable to have the bank draw up a repayment plan that includes the special payments.

Tip: Use Intrasavings loans – Intrasavings bank building loans offer borrowers several advantages, not least because of the low interest rates. Another positive aspect is that the bank considers free special repayments in most contracts.

Prepayment penalty for special repayments

Prepayment penalty for special repayments

If borrowers repay their loan earlier than planned, the banks may charge a prepayment penalty. This is a colloquial contractual penalty that is intended to cover the refinancing and margin damage of the bank. The amount of the prepayment penalty is regulated by law and depends on the remaining term:

  • a maximum of 1 percent of the remaining debt with a remaining term of more than 12 months
  • maximum 0.5 percent of the remaining debt with less than 12 months remaining term

Compare condition of loans and banks

The condition of a loan often differs considerably from bank to bank. Borrowers should therefore compare both the loan and the bank conditions beforehand. The decision for a loan should never be taken lightly.

Condition comparison in mortgage lending

Condition comparison in mortgage lending

Credit contracts usually have a long term. In particular, a building loan often has to be paid off by borrowers over several decades. Excellent conditions can significantly reduce the financial burden on borrowers.

It is therefore advisable for anyone interested to compare the conditions of the credit institutions.

All consumers should pay particular attention to the following aspects:

  • Interest rate
  • Account management fees
  • faster repayment of the loan can be possible through special payments
  • early repayment of the loan amount possible (no prepayment penalty).

Borrowers receive the best and cheapest conditions if they have a good credit rating and a certain amount of equity is available for a real estate loan. A very good credit rating reduces the risk of the banks considerably.

Home savings loans are granted in the course of a building society contract. If you would like to save money for a house with a home savings contract, you can initially negotiate an optional home loan that you can use after a certain saving period. The interest is fixed when the building society contract is agreed, so that you can secure cheap interest. The home loan is a repayment loan.

Use loan calculator to assess conditions

Use loan calculator to assess conditions

By comparing the terms of the loans offered and the terms of the different banks, future borrowers can quickly get a comprehensive overview.

  • There are loan calculators on the Internet that immediately display the effective annual interest and the debit interest. Another important indicator for evaluating the average credit costs for credit-related loans is the two-thirds interest rate. This interest is given by the respective bank to two thirds of the borrowers.

Pesel loan – is it possible to obtain it?

The Pesel loan is increasingly appearing in non-bank companies’ offers. People who need a quick injection of cash are looking for her. Is a Pesel number sufficient to use the loan? Is such a commitment safe and where to look for it? We answer!

What exactly does Pesel mean?


The Pesel number is a number that you will often enter on various forms and applications. It is needed when concluding contracts, when dealing with matters in tax offices and in many other situations. Because you have to give it so often, you may already know it by heart. However, do you know what the Pesel number means?

Pesel is an abbreviation of the Universal Electronic Population Register System. This number is assigned to every natural person. It consists of eleven numbers that specify the date of birth, order number, gender and control number. After this number in the said system you can read a lot of your personal data.

He collects information about, inter alia, the name, surname, citizenship, marital status, spouse’s name and surname, address of residence and ID card number. Any changes that occur in the scope of this data will be saved in the system.

However, only authorized bodies have access to the Pesel database, for example the police, guard, prosecutor’s office or other state administration bodies. Therefore, it is not possible for them to be viewed by unauthorized persons, for example employees of a loan company.

Is a Pesel loan possible?

Is a Lite loan possible?

Due to the growing interest in the non-bank loans market and irritation of clients for too extensive formalities, parabank companies are constantly creating new offers that are to convince clients to use their services. One of the entries that appears in their proposals are loans for Pesel. Can I take a loan at Pesel?

In principle, the Pesel loan is no different from a proof loan. Only the name differs. In practice, it turns out that when filling in the loan application, in both cases the same data must be provided.


The Pesel number alone is not sufficient for the lender to be able to conclude the loan agreement. Additional information is required, such as your ID card number, current marital status or income information.

So can you take out a Pesel loan? Pesel alone certainly not. Therefore, the Pesel loan slogan is in a sense an advertising slogan. However, this number will certainly need to be provided with other details in the application.

Pesel loan and extortion – how to defend yourself?

Lite loan and extortion - how to defend yourself?

Loan companies make sure that their services are as safe as possible. They must not allow loans to be taken by unauthorized persons. First, they would have a problem with recovering. Secondly, they would lose the trust of customers interested in their offer.

Unfortunately, despite many precautions, it is possible that a Pesel loan can be extorted. How is this possible? Contrary to appearances, it is not so difficult to get another person’s Pesel number. You do not have to worry, however, that someone after you give it to the loan company will make a commitment to you.

Each customer of a non-bank company must confirm the given data by presenting an identity document or by knowing its number. However, it may happen that someone uses a fake ID to take out a loan for you. How can you check if someone has taken your payday pay and protect yourself against such situations?

1. Try not to lose your ID card

1. Try not to lose your ID card

Identity cards that fall into the wrong hands can be used by some institutions to take out a loan. It can also serve as a model for people who deal with counterfeiting documents. So try to always have it with you.

If you happen to lose it, report this fact as soon as possible to the commune office, the police or the website.gov.pl, and abroad also at the consulate.

2. Use the Safe Pesel service

2. Use the Safe Lite service

If you do not intend to take out loans in the near future, you can use the Safe Pesel service on safePesel.pl. It does not require logging in and costs nothing. Such a reservation makes it impossible to take a loan on the indicated number.

If someone tries to extort money from him, the loan company will receive an appropriate alert and consider the application negatively.

3. Activate BIK alerts

3. Activate BIK alerts

BIK Alerts is a service of the Credit Information Bureau addressed to individual clients. It allows you to set notifications that you will receive in the form of an SMS when someone monitors your data in the system.

If you are not applying for a loan yourself, on this attitude you will be able to conclude that someone is trying to use your data to extort funds and thus respond accordingly.

What do companies verify when granting a Pesel loan?

What do companies verify when granting a Lite loan?

As you already know, a Pesel loan is possible mainly in theory. Loan companies check a number of data before deciding to grant you funds. What do they most often verify?

  • The compliance of the data on the identity document with the data provided on the form;
  • The correct Pesel number, mobile number and e-mail address;
  • The fact of employment and the amount of monthly earnings;
  • The correctness of the bank account number;
  • A positive credit history and presence on the list of debtors such as ERIF or BIG.

Who can get a Pesel loan?

Who can get a Lite loan?

In practice, the rules for granting loans for Pesel do not differ from the rules for loans for evidence. Therefore, they can be received by adults who have adequate creditworthiness. The specific requirements for clients are defined by loan companies.

Do you know that…

No one can get a loan only for Pesel alone? If a company offers such a solution, it may be a phishing scam.

Pesel loans – where to look for offers

Lite loans - where to look for offers

If you are in a difficult situation and urgently need funds, and you are afraid that you will not get a loan due to entries on the list of debtors, look for a loan without BIK. These are loans that you will get even without a positive credit history .

Also browse Pesel loan offers, but only from proven loan companies.