Is your debt suffering from silly fees?

When you take out a loan, there's nearly always extra fees on top of your regular repayments - and some are more fair than others. We're talking setup fees, admin fees, missed repayment fees, default interest... some lenders even charge you to make extra payments on your loan or pay it off early!

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What's a silly fee?

Some of the fees you're charged are what we like to call "silly fees". These are the fees that we don't think are fair for borrowers. Those early repayment fees are a great example: why should you be punished for wanting to get out of debt and on with life? There's reason why some lenders charge them, of course. By repaying your loan early, you're spending far less on interest, which is where banks and other lenders get their money from. They make up the difference with these fees. Knowing that your lender is still making money off you isn't much of a consolation though.

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Getting serious about silly

So, how can you avoid these silly fees? Well, seeing as how you're reading this article, you're already avoiding a lot of them with a Money Sweetspot loan. Our financial reset loans don't have early repayment fees. You can make as many extra repayments as you like, without costing you extra for the privilege.

Other lenders will waive early repayment fees in some circumstances too. For example, some banks allow you to make a one-off, extra lump sum repayment on a home loan, to a certain value of your loan, every so often. Think being able to repay up to 5% of the value of your balance once every year on a fixed-term mortgage. Variable home loans usually don't have early repayment fees, but they also usually have higher interest rates to balance it all out.

For some of the other fees, like default interest and missed repayment fees, the best way to avoid them is to get in touch with your lender as soon as you think you're going to miss a repayment. Most responsible lenders can work out an alternative payment method that doesn't add extra cost to the loan that may already be causing repayment troubles.

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Quick summary

Most loans come with extra fees. Some of them are understandable, but many, like early repayment fees, we think are just silly. They can be avoided by working with the right lender, or taking advantage of those specific circumstances when a lender doesn't charge them. By avoiding silly fees, you'll be able to pay less on your loan and spend more time living your life. Ka pai!

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