3

Like when you have to pay in installment for 12 months, you came upon a fortune, you decided to pay the remaining months, in one single big payment, to end the debt.

Example Sentence:

I decided to [__________} the installment loan on my car to save money on the interest payments, even though the articles I googled warned me that it could adversely affect my credit rating.

  • 3
    Perhaps a "lump sum"? – GEdgar Dec 27 '17 at 18:43
  • Depends on the circumstances. In the best case you are paying off the principle of the loan. But some loans may require you to pay a fee on top of that, and a few may require you to pay the total sum of the outstanding payments. – Hot Licks Dec 27 '17 at 18:52
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    Usually referred to as "payoff". If you wanted to do this on a car note, for instance, you would call the bank and ask the amount required for payofff, (US) – Oldbag Dec 27 '17 at 19:05
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    I would normally expect to see the querent's blank filled in with pay off. Less common, but if the loan was taken from a pawnbroker, one might see the phrasing redeem [the object pawned]. – Jeff Zeitlin Dec 27 '17 at 19:10
2

In the UK at least we would request a settlement amount, and then settle the loan.

settle verb (PAY): to pay, especially money that you owe

I decided to settle the installment loan on my car to save money on the interest payments, even though the articles I googled warned me that it could adversely affect my credit rating.

  • 1
    Though strictly you can settle a loan by surrendering the collateral as well as by paying it off. – Jon Hanna Dec 28 '17 at 12:12
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This can be called early repayment, eg from https://www.nationwide.co.uk/products/mortgages/our-mortgages/mortgage-calculators/early-repayment

"If you pay off or switch your mortgage before your current deal ends, or if you pay over your allowance, you might incur an Early Repayment Charge."

In your example sentence you might say

I decided to make an early repayment on the installment loan on my car...

0

"Prepayment" is often used in mortgages and other areas of finance, but it also means to pay for something before any of the debt is owed (such as "prepaid postage" on a letter). If it's a mandatory payoff, it's generally called a "balloon payment".

  • Oh, this looks good. I have never heard of a "balloon payment". Could you find a reference that supports this meaning? It's an upvote from me if you post it in your answer (not in the comments). – Mari-Lou A Jan 5 '18 at 12:17

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