In YT, what should I know about prepayment penalty for car loans?

In Yukon, as with car loans across Canada, understanding prepayment penalties is critical and depends primarily on whether your loan is classified as 'open' or 'closed'. Open loans typically offer the flexibility to make lump-sum payments or pay off the entire balance early without incurring additional fees. Conversely, closed loans, which are more common for vehicle financing, often contain specific clauses outlining prepayment penalties designed to compensate the lender for lost interest revenue when the loan is settled ahead of schedule. While there isn't unique Yukon-specific legislation that drastically alters federal or general provincial consumer protection regarding these penalties, the precise terms and calculation methods-which could be a fixed fee, a percentage of the outstanding balance, or a calculation based on remaining interest-are explicitly detailed in your individual loan agreement. In the current (2025) financial landscape, where interest rates and economic conditions can influence your desire to reduce debt, meticulously reviewing your contract's 'prepayment clause' is paramount. This knowledge empowers you to make informed financial decisions, potentially saving you significant interest over the loan's term and improving your overall financial health, but only if the savings outweigh any applicable penalties. Always contact your lender directly for an accurate payoff statement that includes all charges.