What exactly does the phrase "no prepayment penalty" mean? To illustrate, let's consider the following example:
I borrow an installment loan of $1000 and it says that I need to pay $300 monthly for 10 months. But the loan agreement says there is no prepayment penalty. In that case, I can just pay $1300 on the first due date and be done with the loan? It could be slightly less than $1300, depending on how much of $300 is applied to the principal amount.
Obviously, I read the loan agreement form in detail but there is no detailed explanation of what it meant.