Shorter term or lower payment? And is prepaying better than investing the money?
Currency
10 years
What can you do?
Many Romanian loans charge nothing. Fixed-rate consumer loans can charge up to 1% (0.5% in the last year); variable-rate loans none. Check your contract.
Do nothing
Prepay, keep the payment
You finish sooner.
saved €3,135
Prepay, lower the payment
Same end date, smaller instalment.
saved €1,368
Keep the loan, invest instead
The loan runs as planned.
Money you hold at the original end date
Cash freed by paying the loan off early is invested at your return, so the options compare fairly.
Prepaying beats investing while your after-tax return stays under about 8.0%.
Prepaying earns a guaranteed return equal to the loan rate. Investing can earn more, or less, or lose money.
Loan balance over time
Money you build over time
years
Monthly payment
€243
10 years
Total interest
€9,119
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An illustration, not financial advice. Real prices, rates and fees differ.