Extra Repayments
Extra repayments (Sondertilgung): how an unscheduled principal payment either lowers the installment or shortens the term, with both outcomes side by side.
Event: Adjustments → Extra repayments
Also known as: Sondertilgung, prepayment, unscheduled repayment, partial early repayment
Many contracts allow extra repayments, for example up to 5 % of the principal per year without a prepayment penalty. This is a feature of a loan rather than a loan type, but it changes the schedule of every type, and for annuity loans the bank and the borrower have to agree how.
How it works
The extra amount reduces the balance on the day it is paid. For an annuity loan the schedule then continues in one of two ways:
- Lower installment: the maturity stays, the installment is re-sized on the smaller balance.
- Shorten term: the installment stays, the loan is paid off earlier.
Linear and bullet loans keep their pattern; the remaining principal is simply smaller.
Example
100,000 EUR at 4.00 % p.a., 5 years, annuity. An extra repayment of 20,000 is made at the end of year 2, together with the second installment.
Lower installment (maturity kept):
| Year | Installment | Interest | Principal | Remaining balance |
|---|---|---|---|---|
| 1 | 22,462.71 | 4,000.00 | 18,462.71 | 81,537.29 |
| 2 | 22,462.71 + 20,000.00 | 3,261.49 | 39,201.22 | 42,336.07 |
| 3 | 15,255.74 | 1,693.44 | 13,562.30 | 28,773.77 |
| 4 | 15,255.74 | 1,150.95 | 14,104.79 | 14,668.98 |
| 5 | 15,255.74 | 586.76 | 14,668.98 | 0.00 |
| Total interest | 10,692.64 |
Shorten term (installment kept):
| Year | Installment | Interest | Principal | Remaining balance |
|---|---|---|---|---|
| 1 | 22,462.71 | 4,000.00 | 18,462.71 | 81,537.29 |
| 2 | 22,462.71 + 20,000.00 | 3,261.49 | 39,201.22 | 42,336.07 |
| 3 | 22,462.71 | 1,693.44 | 20,769.27 | 21,566.80 |
| 4 | 22,429.47 | 862.67 | 21,566.80 | 0.00 |
| Total interest | 9,817.60 |
Both save interest against the 12,313.55 of the untouched annuity loan. Shortening the term saves the most (2,495.95) because the balance falls fastest; lowering the installment saves less (1,620.91) but eases the cash flow.
In LoanMonitor
- Open the loan and go to Adjustments → Extra repayments, click add, enter the date and amount.
- For annuity loans choose the Mode: Lower installment or Shorten term. Linear and bullet loans need no mode.
- Interest handling decides what happens to interest accrued up to an off-cycle payment date: Settle at event charges it on the event row, Defer to next installment rolls it into the next regular row.
- The schedule recalculates from the event date; earlier rows stay as they were. Exports and the change history show the event.
- AI assistants and automations can file an extra repayment with the
add_extra_repaymentMCP tool; see Connect AI assistants (MCP).
Related
Disagio
Disagio (damnum): a deduction from the payout in exchange for a lower nominal rate; the full principal is repaid. How LoanMonitor shows it in the schedule.
Intercompany and Shareholder Loans
Loans between group companies or from shareholders: the same repayment patterns as bank loans, recorded as borrowed or granted in LoanMonitor.