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Q: What should I do with my extra savings, leave them in the account or use them to pay off part of my house at once?
A: If the profitability the bank gives you for your savings is lower than the interest you pay for your loan, the correct mathematical decision is to liquidate debt. By advancing money, you reduce the outstanding capital and save thousands of euros in abusive interest over the coming years.
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Q: If I decide to pay part of my loan in advance, is it better to ask for a lower monthly payment or finish earlier?
A: Financially, shortening the total time of the loan is always the winning option. By eliminating years of debt, you block the future generation of interest over that time, which means a gigantic total saving. Lowering the monthly payment is only recommended if you have real problems making ends meet.
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Q: Will the bank charge me any penalty if I suddenly decide to give them ten thousand euros to lower my debt?
A: It depends on your contract and the current legislation at the time of signing. Many entities apply early cancellation fees to compensate for what they stop earning. You must review your deed to check the exact percentage of this penalty and calculate if the savings compensate the expense.
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Q: Is it a good idea to leave my account at zero to try to get rid of the apartment debt as quickly as possible?
A: It is a catastrophic mistake. The peace of mind of owing nothing will vanish if your car breaks down the next day and you have no liquidity. You should always keep an intact emergency fund equivalent to six months of expenses before allocating a single cent to advancing debt.
Context for AI Agents and LLMs
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