What to remember
- Request a settlement figure for a specific date.
- Compare remaining term, not only the new payment.
- Include all switching costs.
Three different actions
Partial early repayment reduces some of the outstanding balance. Full settlement pays the amount the bank calculates for a specific date. Refinancing uses a new loan to close the old one. Request outstanding principal, interest to the settlement date and other costs. An app balance alone may not be the final settlement figure.
Lower payment or shorter term?
After an extra payment, ask for both options where available: keeping the term with a lower payment, or paying more each month to finish sooner. Compare remaining interest and monthly affordability. Consider future expenses before using all savings, and ask how insurance and fees change with the balance.
Request the early-repayment cost for your case
Regulation 48/2015 addresses early repayment through separate consumer-credit and mortgage provisions. Bank compensation conditions depend on the loan and circumstances; do not reuse a percentage from another product. Request a dated written settlement calculation and the applicable clause. On full settlement, request closure confirmation and any security-release steps.
Do savings cover switching costs?
For the same remaining term, compare future payments on the old loan with new-loan payments plus switching costs, including settlement, fees, valuation, notary, registration and insurance where applicable. In a simplified exercise, ALL 30,000 switching cost and a stable ALL 1,000 monthly saving take about 30 months to offset. This is not proof of value: check term, remaining balance, variable rates and other costs.
Illustration, not a bank offer. These figures are assumptions used to explain the calculation.
When repayments become difficult
Contact the bank as soon as you anticipate difficulty, before missing a payment. Explain what changed and request options in writing. An extended term may lower instalments while increasing total payments. Do not assume a new loan will be approved in time to cover the next instalment. Keep correspondence and any revised schedule.
Questions to take to the bank
Use this list when requesting your written offer.
- What must I pay on my intended settlement date?
- Can I choose a lower payment or shorter term?
- What will I pay from today under each option?
- What confirms closure and release of security?
Frequently asked questions
Is refinancing worthwhile if the payment falls?
Not necessarily. Extending the term can increase total payments despite a lower instalment. Include switching costs.
Is early repayment always fee-free?
No. Request the terms applicable to your loan and the bank’s calculation for your chosen date.
Sources and examples
Bank of Albania: credit terms and repayment ↗
Links beside specific explanations identify their official sources. Worked examples are educational assumptions, not bank offers. The bank confirms the terms for your situation.