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1. Member States shall ensure that the consumer is at any time entitled to early repayment. In such cases, the consumer shall be entitled to a reduction in the total cost of the credit to the consumer for the remaining duration of the contract. When calculating that reduction, all the costs imposed on the consumer by the creditor shall be taken into consideration.

2. Member States shall ensure that the creditor, in the event of early repayment, is entitled to fair and objectively justified compensation for possible costs directly linked to the early repayment, provided that the early repayment falls within a period of time for which the borrowing rate is fixed. The compensation referred to in the first subparagraph shall not exceed 1 % of the amount of credit subject to early repayment where the period of time between the early repayment and the agreed date of termination of the credit agreement exceeds one year. Where that period does not exceed one year, the compensation shall not exceed 0,5 % of the amount of credit subject to early repayment.

3. Member States shall ensure that the creditor is not entitled to the compensation referred to in paragraph 2 where one of the following conditions is fulfilled:

(a) the repayment has been made under an insurance contract intended to provide a credit repayment guarantee;

(b) the credit is granted in the form of an overdraft facility;

(c) the repayment falls within a period for which the borrowing rate is not fixed.

4. By way of derogation from paragraph 2, Member States may provide that:

(a) the creditor is only entitled to the compensation referred to in paragraph 2 on the condition that the amount of the early repayment exceeds the threshold set out in national law, which shall not exceed EUR 10 000 within any period of 12 months;

(b) the creditor may exceptionally claim higher compensation if the creditor can prove that the loss suffered due to early repayment exceeds the amount determined in accordance with paragraph 2. Where the compensation claimed by the creditor exceeds the loss actually suffered due to the early repayment, the consumer shall be entitled to a corresponding reduction. In that case, the loss shall consist of the difference between the initially agreed borrowing rate and the interest rate at which the creditor can lend out the amount subject to early repayment on the market at the time of that repayment, and shall take into account the impact of the early repayment on the administrative costs.

5. The compensation referred to in paragraph 2 and paragraph 4, point (b), shall not in any case exceed the amount of interest that the consumer would have paid during the period of time between the early repayment and the agreed date of termination of the credit agreement.