What is the sliding scale method?

The sliding scale method calculates the fee proportionally based on the remaining loan period. The fee is higher when you repay early in the loan term and lower towards the end.

When are prepayment fees waived?

Many lenders waive prepayment fees after a certain period (often 3 years in Korea). However, conditions vary by loan product, so check your loan agreement.

Loan Prepayment Fee Calculator - Early Repayment Costs

Repayment Time	Applied Rate	Est. Fee
6 months	1.17%	$1,166,667
12 months	0.93%	$933,333
18 months	0.7%	$700,000
24 months	0.47%	$466,667
30 months	0.23%	$233,333
36 months	0%	$0

Repayment Time

Applied Rate

Est. Fee

6 months

1.17%

$1,166,667

12 months

0.93%

$933,333

18 months

0.7%

$700,000

24 months

0.47%

$466,667

30 months

0.23%

$233,333

36 months

What is a Prepayment Fee?

A prepayment fee (or prepayment penalty) is a charge imposed by lenders when you pay off your loan before the maturity date. It compensates the lender for the interest income they lose when you pay early.

What is Sliding Scale?

The sliding scale method calculates the fee proportionally based on the remaining loan period. Formula: Base fee rate × (Remaining period / Total loan period). The fee is higher when you repay early in the loan term and lower towards the end.

Applied Rate = Base Rate × (Remaining Period / Total Period)

Prepayment Fee Regulations

Many countries have regulations limiting prepayment fees. Check your loan agreement and local regulations before making early repayments.

Before You Prepay

✓Check your loan agreement for fee rates and terms
✓Look for fee exemption periods
✓Consider partial prepayment to reduce fees
✓Compare refinancing costs vs prepayment fees

Frequently Asked Questions

When is the prepayment fee waived?

In Korea, mortgage prepayment fees are waived after 3 years from the loan start date. However, this may vary by lender and loan type, so check your contract.

Is the fee charged for partial prepayments?

Yes, fees are charged on the amount prepaid. Some lenders allow a certain amount of prepayment per year without fees.

📋 Complete Prepayment Fee Guide

What is a Prepayment Fee?

A prepayment fee is charged when you pay off your loan principal before the maturity date. Financial institutions earn revenue through loan interest, and this fee compensates for the lost interest income due to early repayment. In Korea, fees are typically charged for repayments within 3 years of the loan date.

Understanding the Sliding Scale Method

The sliding scale method reduces the fee rate proportionally based on the remaining period. For example, with a 3-year application period and 1.5% base rate: repaying after 1 year means ~1.0% fee, after 2 years ~0.5% fee. This method is more consumer-friendly.

💡 Prepayment Checklist

✓ Check exact fee rate in loan contract
✓ Verify fee waiver period (usually 3 years)
✓ Check if fees apply to partial payments
✓ Compare fee vs remaining interest for best option