FAQ

Reducing the loan term drastically cuts the total interest you will pay to the bank over time. By shortening the duration, your principal drops faster, leading to exponential savings. On the other hand, reducing the monthly installment provides immediate monthly relief, which is ideal if you need to increase your current cash flow or monthly liquidity.

In Italy and the US, prepayment penalties are prohibited by law for most primary residence mortgages. In the UK, banks typically allow free overpayments up to 10% of the remaining loan balance each year. Always verify your specific contract conditions and applicable regulations with your bank, as terms may vary based on your lender and location.

When you make a partial prepayment under the French amortization schedule, the extra money goes entirely toward reducing the outstanding principal debt, not the interest. Since future interest is calculated only on the remaining principal, shrinking this number immediately lowers the amount of interest accrued in all subsequent months, keeping more money in your pocket.