"Are prepayment penalties on car loans legal in DC? "
I live in Washington, DC and financed a car two years ago. I now have the money to pay off the loan, but I don’t know if I will be penalized for doing so. I heard that these penalties are illegal in some states. What about in DC?
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Answered on May 05, 2021
“Prepayment penalties are legal in a majority of states—36 to be exact. And they are also legal in the District of Columbia, so you may be penalized for paying off your loan early.
But having said that, not all loans come with prepayment penalties. Contact your lender or read your loan contract to confirm whether or not you’ll be charged for prepaying. “
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