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Glossary entry

French term or phrase:

soulte de rupture des conditions financières

English translation:

Early (partial) repayment charge

Added to glossary by Sarah Russell
Dec 31, 2022 14:36
1 yr ago
34 viewers *
French term

Soulte de Rupture des Conditions Financières

French to English Bus/Financial Finance (general)
Following on from my previous question (https://www.proz.com/kudoz/french-to-english/finance-general... under the same clause, if the client decides to prepay part of the loan granted to them by the Bank, they must pay 'une somme égale : au capital remboursé majoré d'un complément de la Prime de Garantie de l'Etat dû sur la durée résiduelle du Prêt, majoré de la soulte (la 'Soulte de Rupture des Conditions Financières')'.
I would like to put forward 'Loan Prepayment Fee/Penalty' as a suggested solution but really need the help of an industry professional to clarify whether this is correct or to suggest the best translation.
Thanks very much in advance if you're able to help me with this!
Sarah
Proposed translations (English)
3 +2 Early (partial) repayment charge
4 Early redemption penalty
4 -1 compensation for breach of financial terms
3 -1 Break-Fee Balancing Payment
References
Soulte : définition et exemples
Change log

Jan 19, 2023 17:28: Sarah Russell Created KOG entry

Discussion

Daryo Jan 9, 2023:
Point of method You'll never get it right if you don't understand the logic / the way of thinking of a profession.
This might be "just a joke" but in fact it's how bankers view the world:

"A cyclist is a big disaster for the country...
He doesn't buy a car, doesn't take a loan, doesn't get car insurance.. doesn't buy oil, doesn't take a loan.. doesn't get car service.

He is not even fat. A healthy person is useless for the country's economy ... because he does not take medicines… because he does not need them. He doesn't go to the hospital because he doesn't need it. He does not meet the doctor because he does not need it, he is not contributing to the GDP of the nation.

On the contrary, fast food shops create 30 jobs. 10 heart doctors, 10 dentists, 10 different types of people who want to lose weight….

But pedestrians are even more dangerous because a pedestrian doesn't even buy a bicycle"

Now, do you see someone with that kind of mindset being happy that you repaid your loan earlier? Not seeing it the most literally as a "breach of contract"? "rupture" wasn't used by accident or by mistake in the ST.
Daryo Jan 5, 2023:
"Balancing payment" or compensation, it may be, but in reality these terms are rarely, if ever, used in English language loan agreements.

So what? The term "the President" is never used in UK politics, so how would you translate "le Président de la République"?

The translation has to reflect the realities of the French system.
Francois Boye Jan 3, 2023:
"les conditions financières" capture all the possibilities likely to affect the lender or the borrower. So an early repayment is not a breach of financial terms. why? Because early repayment is a common financial term.

What Allegro and Phil don't see is that the word 'rupture' is a strong word in French. It entails that the borrower has done something beyond the possibilities likely to affect a borrower, which is a breach of the financial terms.
AllegroTrans Jan 2, 2023:
"Balancing payment".... or compensation, it may be, but in reality these terms are rarely, if ever, used in English language loan agreements.
Daryo Jan 1, 2023:
"la soulte" in effect is a compensation for losses incurred by the other party due to a "breach of agreed financial terms".

From the banker's point of view repaying your loan too early is definitely considered as "bad behaviour", a "breach of agreed financial terms", even worse that being late with your repayment: no more interest to charge (= loss of planned future revenues).

Especially if it's a secured loan (meaning: "no risk income" / guaranteed repayment interest included) - bankers will then be particularly not pleased by an early repayment.

So strictly speaking "la soulte" here is a kind of "compensation" (for loss of expected future revenues). OTOH not sure what would be the usual technical term.

Often it's left untranslated:

https://www.lawinsider.com/dictionary/soulte
philgoddard Dec 31, 2022:
We've had this before, but neither of the answers was very good in my opinion:
http://www.proz.com/kudoz/french-to-english/law-contracts/11...
I think your suggestions are fine.

Proposed translations

+2
1 hr
Selected

Early (partial) repayment charge

Example sentence:

When deciding whether an early repayment charge on a personal loan is worth it, it can help to consider the following rules of thumb as a rough guide:

The bank charges borrowers an early repayment charge (ERC) to recover the loss the bank incurs when a loan is partially or fully repaid earlier than agreed.

Peer comment(s):
agree philgoddard
1 day 2 hrs
Thank you, Phil!
agree AllegroTrans : or early repayment fee
1 day 5 hrs
Thank you, AllegroTrans!
agree Anastasia Kalantzi
1 day 19 hrs
Thank you, Anastasia!
disagree Francois Boye : Early repayment is a common financial term. It doesn't représent what the word 'rupture' means.
3 days 33 mins
Something went wrong...
4 KudoZ points awarded for this answer. Comment: "Selected automatically based on peer agreement."
-1
32 mins

compensation for breach of financial terms

That is what I got
Peer comment(s):
disagree philgoddard : I don't think this is appropriate here. The borrower isn't doing something wrong.
10 mins
disagree Andrew Bramhall : It's not that sorry.
8 hrs
agree Daryo : However it might seem absurd to Joe Public, that's exactly what IT IS - from the viewpoint of the lender of course: repaying your loan too early deprives the lender of expected income from charging interest, not good for the lender!
19 hrs
agree Francois Boye
23 hrs
disagree AllegroTrans : Agree with Phil, an English language loan agreement would not call this a breach, nor would any court
1 day 6 hrs
Something went wrong...
6 hrs

Early redemption penalty

Feedback
What Is An Early Redemption Penalty or Charge?
https://www.lendingexpert.co.uk/guides/what-is-an-early-rede...
Web05/02/2019 · Early redemption penalty can translate into thousands of pounds and thus very important to take into account. However, other charges could also be associated with a loan or mortgage even with early redemption charges. An exit fee is one such charge you …

EXPLORE FURTHER
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Avoiding Early Repayment Charge — MoneySavingExpert …
forums.moneysavingexp…
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How To Avoid Paying an Early Redemption Penalty - Mort…
mortgagesorter.co.uk
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Early Redemption Penalty - against income or CGT?
taxationweb.co.uk
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Tax treatment of an early repayment charge due to a sale
forums.landlordzone.co.uk
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Unfair mortgage early repayment charges - MoneySavingExp…
forums.moneysavingexp…
Recommended to you based on what's popular • Feedback
Early Redemption Penalties on Loans - Tax Insider
https://www.taxinsider.co.uk/early-redemption-penalties-on-l...
WebThis has been taken to mean that an early redemption penalty on repaying a loan was a …

Early repayment charges and redemption fees - Uswitch

https://www.uswitch.com/loans/early-repayment
Web27/07/2022 · Early redemption fee Redemption charge Financial penalty Have a look in the documents you were given when you took out the loan. These should explain whether there are any redemption...

Why might I need to pay redemption fees?
Peer comment(s):
neutral AllegroTrans : while I agree that it is a form of penalty, my experience is that in English it is almost invariably referred to as a charge or a fee, in reality the borrower is doing nothing wrong
1 day 46 mins
Yes, you're right; it should have been 'fee';
Something went wrong...
-1
6 hrs

Break-Fee Balancing Payment

Note soulte often (AmE: oftentimes) means balancing payment.

I don't now think that *prepayment penalty* really fits the bill with the wording quoted: '...sur la durée résiduelle du Prêt, majoré de la soulte..' = over the residual term of the Loan, plus the balancing payment / adjustment...

Acceleration of the term applies, mainly (possibly only) if the lender calls in the loan: 'an acceleration clause will require the borrower to immediately pay the full balance owed on the loan if terms have been breached.'

Otherwise, I doubt this voluntary loan prepayment would - in the Anglo-Am. financial & banking world - be considered a 'severance payment' or 'break with or breach of the financial terms & conditions' but cut to break fees in Australia.


--------------------------------------------------
Note added at 6 hrs (2022-12-31 21:30:59 GMT)
--------------------------------------------------

Note that the sloppily and oft-misused term of *redemption* applies predominantly to a mortgage, company debenture, bond or company shares and repayment to an ordinary loan or capital. Exception : life assurance capital redemption https://www.lawinsider.com/dictionary/capital-redemption-bus...
Example sentence:

Oz: when you approach your lender about *changing your loan terms*, they may tell you that a fee will be payable. Your lender may refer to this as a ‘break fee’, an ‘early exit fee’ or ‘economic cost’. 

a balancing payment in cash. vinci.com [...] une soulte en numéraire

Reference:

http://www.afca.org.au/coronavirus-covid-19-pandemic-support-hub/banking-and-finance/factsheet-break-fees

http://www.forbes.com/advisor/mortgages/prepayment-penalty-what-it-is-and-how-to-avoid-one/

Peer comment(s):
neutral Daryo : you meant to say "break-free"? OTOH "Balancing Payment" makes sense.
19 hrs
disagree AllegroTrans : Never seen this term in any loan agreement
1 day 1 hr
Something went wrong...

Reference comments

20 hrs
Reference:

Soulte : définition et exemples

Soulte : définition et exemples

Qu'est-ce qu'une soulte ? Définition juridique et exemples.

La soulte est un terme juridique désignant une somme d'argent dont doit s'acquitter une personne qui a reçu des biens d'une valeur supérieure à ce qu'elle aurait normalement dû recevoir. La soulte vise à compenser le préjudice subi par les autres parties concernées par le partage. La soulte est principalement utilisée en matière de succession (lors du partage successoral), en cas de divorce ou d'échange de biens. Il constitue en quelque sorte une mesure de compensation. Une donation-partage peut prévoir le versement d'une soulte.

Lors d'un divorce, il est très fréquent que l'un des conjoints verse une soulte à son ancien époux dès lors qu'il a reçu, lors du partage, des biens (immobiliers notamment) d'une valeur supérieure au montant auquel il avait droit. Le versement de la soulte permet ainsi d'équilibrer les comptes avec l'autre époux.

https://droit-finances.commentcamarche.com/patrimoine/guide-...


To be left untranslated?

More Definitions of Soulte

Soulte means, in relation to any Enforcement Action occurring by way of Appropriation of Lien governed by French law, the amount by which the value of the Collateral appropriated, foreclosed or transferred pursuant to that Enforcement Action (as determined in accordance with the relevant Security Document or at law) exceeds the amount of the First Lien Obligations and/or the Second Lien Obligations secured by that Security Document which is discharged pursuant to the Appropriation.



Soulte means, in relation to any enforcement of any Security Document occurring by way of Appropriation (including pursuant to a pacte commissoire or a foreclosure (attribution judiciaire) or any similar enforcement mechanism) or judicial foreclosure of any French Security Document, the amount by which the value of the Charged Property (as determined on the date of the relevant Appropriation by a valuation expert in accordance with the provisions of the relevant Security Document) appropriated or foreclosed pursuant to that enforcement exceeds the amount of obligations secured by that security interest which is discharged as a result of that enforcement being carried out.

https://www.lawinsider.com/dictionary/soulte
Peer comments on this reference comment:
agree Anastasia Kalantzi : Une soulte est une compensation financière qui vient équilibrer un échange de marchandises (ou de terres le plus souvent). Si nous échangeons nos maisons et que la vôtre vaut 50 000 euros de plus que la mienne, la soulte sera de 50 000 euros.
1 day 1 min
Vérifier au lieu de supposer semble être une méthode beaucoup trop exotique, pas suffisamment "pro", apparemment. Merci!
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