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
- Call the bank or access the app
- Request a simulation of early payoff
- Compare the discount offered
- If you agree, make the payment
- Request a written proof of payoff