Question about early repayment and clause in the contract

Hello,

in a loan component we have the following clause:

Early repayment/compensation payment

The prepayment compensation may not exceed the following amounts:

[*]- 1% or, if the period between the early and the agreed repayment is less than 1 year,

0.5% of the amount repaid early.


[*]- the amount of the interest on the loan amount that the borrower would have paid in the period between the early and the

agreed repayment.

..

Just want to make sure I understand correctly – assuming I repay 5,000 euros right at the beginning – then according to point 1 it may be 25 euros, because 0.5%? And if point 2 is higher, which is likely because repayment is made at the beginning, then the 0.5% of the repaid sum still applies? Did I understand that correctly?

The model should actually allow repayments at any time and I want to make sure that, if at all, only very small fees apply.

Thanks in advance!

I would assume 50 euros, provided your term is longer than one year and interest rates are greater than 1%.

Given the current interest rate situation, rather a disadvantage compared to the usual regulations.

I believe this is simply a "confusion" between special repayment and early (i.e., complete) repayment. Hence the prepayment penalty.

The question for me would rather be whether there is a possibility for a special repayment in this contract.

okay, 1% if I repay early, but that also applies to an early repayment that then concerns the entire remaining sum, or why should it be less or more then? When does the second point apply that all the interest must be paid? That is clearly more than 1% of the repayment amount?

Edit: Yes, it is about the early repayment after all, why should it not exist if there is a clause for it?

Here again in the exact wording:
Early Repayment
(You have the right to repay the loan in full or in part early at any time. The lender is entitled to compensation in case of early repayment.)

Yes
An early repayment penalty of 1% on the early repaid loan amount will be charged, and if the remaining term is less than 12 months, 0.5% of the early repaid loan amount.



and further below


Early Repayment/Compensation Payment

The borrower has the right to repay the loan in full or in part at any time.
In the event of early repayment, xxxx Bank is entitled to reasonable early repayment compensation for the damage directly related to the early repayment. This

damage will be calculated according to the financial mathematical conditions prescribed by the Federal Court of Justice for the calculation, which in particular

[*
- an interim decreased interest rate,


[*]- the originally agreed payment flows for the loan,


[*]- the profit lost by the bank,


[*]- the administrative expenses associated with the early repayment (processing fee) as well as


[*]- the risk and administrative costs saved as a result of the repayment.

The early repayment penalty may not exceed the following amounts in each case:

[LIST]
[*]- 1%, or if the period between the early and the agreed repayment is less than 1 year, 0.5% of the early repaid amount.


[*]- the amount of interest that the borrower would have paid during the period between the early and the

agreed repayment.

Will you find yourself in the position to repay the entire loan in one go?