When a redemption fee is charged, which of the following is not required to be provided to the borrower?

• A. A copy of the loan offer.
• B. A worked example of the redemption charge.
• C. Details on how the charge is calculated.
• D. All of the above.

Answer: (A)

When a redemption fee (early repayment charge) applies, the focus of disclosure is on how the charge works so you can understand its cost if you pay off the loan early. The lender must explain the exact method used to calculate the charge and provide a worked example showing how much the charge would be at different points in time. This helps you compare costs and plan when you might redeem.

A copy of the loan offer, while important as part of the overall loan documentation, isn’t part of the specific redemption-fee disclosure requirements. The loan offer covers the general terms of the loan, not the detailed disclosure of how and how much the redemption charge would be. Therefore, it’s not required to be provided as part of the redemption-charge information, making it the best choice. The required elements are the calculation details and a worked example.