When a loan of any kind is activated, whether it is a mortgage or a personal loan or a salary loan, you have the option of settling it before the contract expires.
As required by current legislation (art. 125-sexies) the consumer can repay in advance, even partially, the amount received following a loan contract.
But how do you know how much and where to pay?
It is necessary to request an extinguishing statement from the financial institution with which we have entered into the contract which will calculate the residual debt.
Request extinctive counting
The request for the extinction count should be forwarded soon to the institution that provided the loan. Usually on the contract there is a specific contact to make the request.
Otherwise it is advisable to contact the financial company to get an email or a postal address where you can submit the request for extinction counting to avoid forwarding the request to incorrect addresses and risk wasting time.
The request can be made on plain paper indicating the number of the contract (the indication of the installment you are paying and the type of loan is also fine) and attaching a valid identity document.
Remember to indicate also where you would like to receive the extinction count. The advice is to do everything by e-mail to shorten the timeframe.
Timeline release deadline
Once the request has been made, the financial institution must release the document within 10 working days.
It is essential to proceed with the request correctly following the instructions of the financial company, especially if there is a particular urgency.
As for example in the case of a renewal of the fifth assignment where, in order to proceed with the procedure, it is essential to be in possession of this document in order to obtain the required liquidity.
What data will we find in the extinction count?
But how is the extinction calculation related to the residual debt of the loan calculated?
In the document we will initially find the total gross amount (installment for total duration of the loan) from which the following items will be deducted:
- installments paid
- write off interest related to the remaining period (cannot be due because we close the loan first)
- Any repayments of financial commissions
- any reimbursement of agent commissions
The result will give us the principal amount to be repaid to close the loan.
In the calculation of the settlement of extinction we will also be able to find any unpaid quotas and penalties if provided for in the contract (in any case not exceeding the provisions of the law) which will be added to the residual capital.
The loan can be extinguished by making a transfer using the IBAN indicated in the document of the precise amount that was calculated for us.
Validity extinguishing count
The extinction count always shows an expiration date beyond which it is no longer possible to use the calculated amount.
Usually the last day of the month is entered as the deadline but many financial institutions give the possibility to use it even until the end of the following month.
In this case, the amount of daily interest indicated by the credit institution must be added to the calculated amount.
If, for example, we extinguish the loan 3 days after the due date and the daily interest amounts to € 0.20 we will have to add € 0.60 to the calculated amount.
Repayment of installments and additional costs
Pay attention if the calculation of the extinction count shows unpaid amounts that you have actually already paid.
In fact, it is possible to find within the extinction count one or more unpaid installments that were actually paid by you but which are not yet accounted for by the system.
In this case you will have to be reimbursed having paid it twice.
If you have also taken out an insurance policy linked to the loan agreement, you should know that you are entitled to an insurance reimbursement for the unused premium.
Then check that there is this reimbursement item. In case of contraction contact the finance company to understand what the reimbursement modalities are.