Early Repayment Charge

An Early Repayment Charge (ERC) is a fee charged by a lender if a loan is paid off before the agreed loan term ends. It compensates the lender for lost interest or administrative costs.

With bridging loans, ERCs may apply if a property sells earlier than expected or if the borrower exits ahead of schedule. This is especially relevant when the loan uses a retained interest structure, where interest is pre-calculated.

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