Can I repay a business loan early?

Usually you can, but how much it benefits you depends entirely on the lender, and this is an area where offers differ more than people expect.

Three broad approaches are common:

• Early repayment saves interest. You only pay for the time you had the money, so settling early genuinely reduces the cost.
• An early repayment fee applies. You can repay early, but a charge offsets some or all of the saving.
• Interest is effectively fixed. The total cost is set at the outset, so paying early clears the debt but saves little on the charge.

None of these is hidden or unusual, but they make a real difference if there is any chance you will want to repay ahead of term, for example if you expect a lump sum or plan to refinance later.

Because it varies so much, it is one of the specific terms we check when comparing lenders. If flexibility to repay early matters to you, tell us at the outset and we will weight the comparison towards lenders who offer it on fair terms.