UBA enforces end to early loan repayment fees by banks
Banks earn a portion of their revenue from interest charges or fees on loans. When borrowers settle their loans prematurely, banks miss out on the interest income they would have otherwise earned. Prepayment penalties are often used by some banks to compensate for this loss.
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Wilbrod Owor, the executive director, UBA.
By NewVision Reporter
Journalists @NewVision
Commercial banks have decided to eliminate the unpopular practice of imposing penalties on customers who repay their loans ahead of schedule. The decision follows public outcry and pressure