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A lot of loans have prepayment penalties, and some don't allow prepayment at all.

Prepayment penalties are often disguised. For instance, when you take out a mortgage you have the option to pay "points" and lower your interest rate. They tell you for comparison purposes "Your overall interest rate will be lower if you pay the points now." But they don't tell you that if you accept points and then refinance or pay your mortgage off early, your overall interest rate is higher. Paying points is only a good idea if you intend to pay the mortgage exactly as the bank wants it.

Another way of sneaking in prepayment penalties is to say "We use simple interest calculation." Basically that means that there is no prepayment penalty if you pay it off right away, but as time goes on the prepayment penalty increases. Paying off the loan halfway through hits you with the greatest prepayment penalty.
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