Redemption fees is another term for early repayment charges. It’s the charge you pay if you choose to repay your loan earlier than the original final repayment date.
Lenders do this to try and get back some of the money they’ll lose out in interest repayments if you repay your loan early. A typical penalty amount is about the equivalent of one or two months’ loan interest.
So, if you are considering repaying your loan back early, it’s definitely best to work out whether it’s worth paying the loan back earlier or not.
Also, not all loans have an early repayment charge. So always check with your lender first.