What do we talk about when we hear Early extinction Cession of the Fifth?
When a loan is made immediately after entering into the loan agreement, the client has the right to also request the early repayment of the loan, in order to maintain the loan’s life. In doing so you will have a double advantage: amount and total installment to be paid lower. In a loan contracted with the product Cessione del Quinto all employees and pensioners, according to the legislation, can extinguish it at any time.
What to do to request early extinction of a Fifth Assignment?
During the amortization period of a loan can happen, by virtue of event or an availability of cash, they decide to pay off the loan current. In these cases the first thing to do is to check where to send the request for early repayment and extinguishing account . Usually within the contractual documentation of the Financial Institution that provided the loan there are always references to which to make the request which can be: Mail – Fax – Registered. You should use one of the references and submit a written request with your identity card and a health card indicating Institute that provided the loan where you want to receive the early repayment account.
How is the extinction account of the fifth assignment calculated?
The extinction account of the Assignment of the Fifth is calculated at the time it is requested and has a deadline, generally, which ends within the month following the request. For example, if we have made a sale of the fifth of 10 years and after 5 years we have decided to extinguish it, once the request has been made, the Financial Institution will calculate and issue the extinguishing account by subtracting from the total calculation and the amount to be repaid all the installments paid and accounted for up to that time and all interest for the entire remaining period, ie for the next 5 years.
What are the entries in the Extinguishing Account of a Cession of the Fifth?
Even if each Financial Institution has its own “extinguishing” model, normally the following items are present:
a) initial debt given by the installment for the total duration 200 x 12th amount or € 24,000;
b) installments overdue by installment for the period paid example 200 x 60 installments Amount € 12,000;
c) interest rebates on the residual amount for the remaining period;
d) any expected repayments;
e) compensation, where envisaged, in favor of the Financial Institution for prepayment (usually not exceeding 1% of the residual capital);
f) the amount to be extinguished;
g) the IBAN of the Financial Institution where the payment is to be made;
h) the deadline for making the payment.
The Financial Institution, once the transfer of the indicated amount has been received and accounted for, will provide both to send the customer a document called “release” where he will confirm the extinction of the loan and to inform the administration or the social security institution to no longer carry out the withholding of salary or pension payments.