S.L. 378.12 Art. 16Right to early repayment.

(1) A consumer shall have the right to discharge his obligations under a consumer credit agreement, in full or in part, before the agreed termination.

(2) If the consumer pays the creditor before the agreed termination:

(a) the consumer shall be entitled to a reduction of total costs of the credit consisting of the interest and the costs for the remaining duration of the credit; and

(b) the creditor shall be entitled to a fair and objectively justified compensation for possible costs directly linked to early repayment of credit so long as the early repayment falls within a period for which the borrowing rate is fixed.

(3) The compensation referred to under sub-regulation (2)(b) may not exceed:

(a) 1% of the amount of credit repaid early, if the period of time between the early repayment and the agreed termination of the credit agreement exceeds one year; and

(b) 0.5% of the amount of credit repaid early, if the period of time between the early repayment and the agreed termination of the credit agreement does not exceed one year.

(4) (a) The limitations under sub-regulation (3) in terms of the amount of compensation which may be claimed by the creditor shall exceptionally not apply if the creditor proves that the loss suffered from early repayment exceeds the amount determined under the said sub-regulation (3); and

(b) A consumer may claim a corresponding reduction to the compensation claimed by the creditor if the compensation claimed exceeds the loss actually suffered.

For the purpose of this sub-regulation, the loss suffered shall consist of the difference between the initial agreed interest rate and the interest rate at which the creditor can lend out the money repaid early on the market at the time of early repayment. Consideration shall also be given to the impact of early repayment on administrative costs.

(5) Compensation for early repayment under sub-regulation (2)(b) shall not apply:-

(a) if the repayment has been made under an insurance contract intended to provide a credit repayment guarantee;

(b) in the case of an overdraft facility;

(c) if the repayment falls within a period for which the borrowing rate is not fixed; or

(d) if the amount of early repayment does not exceed three thousand euro (€3,000) within any period of twelve months.

(6) A creditor may not claim compensation which is in excess to the amount of interest which the consumer would have paid during the period between the early repayment and the agreed date of termination of the credit agreement.