Meaning
An Early Repayment Charge (ERC) is a fee applied by lenders.Definition
An Early Repayment Charge (ERC) is a penalty fee levied by a lender if you pay off a loan, mortgage, or other credit agreement sooner than the agreed term.How It Works
Lenders set these charges in your loan agreement. If you make extra payments or clear your debt early, you might incur this fee.Purpose
Its purpose is to compensate lenders for the interest income they lose when a loan is repaid ahead of schedule.Author
