Understand the Reinvestment Indemnity Before Repaying Your Loan Early
Thinking about repaying your loan early? Whether fully or partially, early repayment can save you interest, but it may also trigger a reinvestment indemnity. Knowing how this indemnity works helps you make a smart and fully informed decision about your credit.
In this guide, our legal expert explains in clear and practical terms what the reinvestment indemnity is, how it is calculated, and in which situations it may or may not be claimed by your lender. Take a few minutes to understand the rules that protect you and the limits set by law. Get your free simulation for Indemnité de RemploiA free, no-obligation simulation to assess the impact of an early repayment on your current or future loan.
Early Repayment & Reinvestment Indemnity: The Essentials
Early repayment often arises when you:
- Resell a property or refinance an existing loan
- Receive an inheritance, bonus, or savings you want to use
- Wish to reduce your monthly instalments or the total cost of your credit
In each of these situations, your lender may claim a reinvestment indemnity. The good news: this indemnity is strictly regulated and capped by law in 2026.
What Is a Reinvestment Indemnity?
Good to know
The reinvestment indemnity is only due in specific cases and must always be justified and calculated based on the outstanding capital and the remaining duration of your contract.
How Is the Reinvestment Indemnity Calculated?
The law provides that, in the event of full or partial repayment of a loan with interest, no reinvestment indemnity can be claimed from the debtor, apart from the repaid capital and accrued interest, in an amount exceeding the equivalent of 6 months of interest calculated on the repaid amount at the rate set by the agreement. This legal cap, still applicable in 2026, aims to prevent abusive or disproportionate charges. In practice, lenders often insert a standard clause in the loan contract specifying that the indemnity cannot exceed:- 1% of the capital repaid early when the contract still runs for more than one year, or
- 0.5% of the capital repaid early when the contract still runs for less than one year.
Your Rights as a Borrower
As a consumer, you are free to repay all or part of your loan early at any time. The lender cannot refuse this principle, but they can apply the indemnity provided for by law and by your contract, within the legal limits. To exercise this right correctly, it is essential to respect the required procedure and deadlines, so that the indemnity is clearly communicated and you can check its calculation before making your decision.Key Conditions in 2026
- Legal cap: maximum 6 months of interest on the repaid amount
- Contractual practice: 1% or 0.5% of the capital repaid early
- Indemnity forbidden when the debit rate is variable at the time of repayment
- Indemnity may never exceed the interest you would have normally paid
How to Proceed with an Early Repayment
Before making an early repayment, it is advisable to compare the total cost of your loan with and without early repayment, taking into account the reinvestment indemnity. This analysis helps you determine whether the operation is financially beneficial and within what time frame you will recover the cost of the indemnity through the interest savings. The law also imposes a clear and transparent procedure on lenders. This allows you to obtain, in writing, all the details regarding the indemnity claimed and its calculation, so that you can verify the figures and request clarification if necessary.To repay early, you must notify your lender of your intention by registered mail at least 10 days before the repayment date. This formal notice allows the lender to calculate the outstanding capital, the accrued interest, and the possible reinvestment indemnity applicable to your situation.
Within 10 days of receiving your registered letter, the lender must communicate to you, on a durable medium (simple mail or email), the exact amount of the indemnity claimed and a clear explanation of the calculation. This transparency obligation allows you to check that the legal limits and contractual conditions have been respected.
Once you have received the calculation, you can decide whether to maintain the early repayment, adjust the amount repaid, or postpone your project. You remain free to repay all or part of your loan, and you can also ask for advice to balance the benefit of the interest savings with the cost of the indemnity.
Why Clarify Your Reinvestment Indemnity?
Legal Protection
The legal cap on the reinvestment indemnity protects you against excessive charges. Knowing your rights helps you contest any calculation that exceeds the authorised limits.
Optimised Financial Decision
By comparing the indemnity with the interest saved, you can clearly see whether early repayment is advantageous, and decide on the optimal timing and amount to repay.
Better Management of Your Loans
Mastering the mechanisms of the reinvestment indemnity allows you to better plan refinancing, property sales, and future credit projects while controlling your total borrowing cost.
Plan Your Early Repayment with Full Transparency
Before repaying your loan early, estimate the reinvestment indemnity and the total savings you could achieve. Our experts help you read your contract, understand the legal rules in 2026, and make an informed choice.
Get your free simulation pour Indemnité de RemploiQuick, online, and without commitment. Receive a clear overview of the costs and benefits of your early repayment.