What are prepayments?
Prepayments are accelerated repayments of the principal of the loan, typically made to realize a savings on interest. There are no penalties for prepaying. If your loan is repaid in full before the expiration of its grace period, no interest is charged (except on certain university loans). Payments in excess of your regularly scheduled amounts are applied to the principal balance as prepayments. Unless the prepayment repays the loan in full, the next payment will be due the next month.
