What is Early Payoff?

Early payoff is paying off a debt (financing, loan, consortium) before the final deadline. When you do this, you are entitled to a discount on the interest that would be charged in the future. It’s a right guaranteed by the Consumer Defense Code.

Your rights

  • You can pay off any debt early
  • The bank is required to give a proportional discount on interest
  • Cannot charge a penalty for early payoff
  • Can be partial (amortize) or total (pay off everything)

How much you save

Example: financing of R$ 200,000 in 30 years at 10% per year.

  • Total you would pay: ~R$ 632,000
  • If you pay off in 15 years: ~R$ 387,000
  • Savings: R$ 245,000 (almost the value of the property!)

When it’s worth paying off

✅ Worth it:

  • Interest on the debt is higher than the return on your investments
  • Real estate financing with high rates (>9% per year)
  • Personal and consigned loans
  • When you have idle money earning less

❌ Not worth it:

  • Interest on the debt is lower than what your investments yield
  • Financing with very low rates (<7% per year)
  • If you’ll be left without an emergency reserve

How to do it

  1. Call the bank or access the app
  2. Request a simulation of early payoff
  3. Compare the discount offered
  4. If you agree, make the payment
  5. Request a written proof of payoff