Yes, in most cases you can settle an asset finance agreement early. You ask the lender for a settlement figure, which shows what you need to pay to clear the agreement on a given date. The figure is usually less than the sum of your remaining payments, but early settlement often carries a charge, so it is rarely as simple as stopping payments.
How the figure is calculated depends on the type of agreement and on your contract terms. Regulated agreements carry statutory rules on early settlement rebates. Unregulated business agreements — which many asset finance deals are — are governed by what the contract says, and terms differ from lender to lender. There is no single formula across the market.
On hire purchase, settling early normally means title passes to you once the figure and any option-to-purchase fee are paid. On a lease, early termination is usually treated differently again, and the asset may still have to be returned or sold on the lender’s behalf.
Ask for a written settlement figure before committing to anything, and check whether it is valid only to a certain date. If you are settling in order to refinance or upgrade, get the figure first so you can compare the true cost of both routes.
CW Asset Finance does not charge you a broker fee. We are paid commission by the lender when an agreement completes. Lenders may charge their own documentation, arrangement or option-to-purchase fees, which are shown in the quotation before you sign.