(1) A consumer may at any time discharge fully or partially his or her obligations under a credit agreement. In such cases, he or she is entitled to a reduction in the total cost of the credit to the extent of the interest and the costs for the remaining duration of the agreement.

(2) Subject to paragraphs (3) to (6), in the event of early repayment of credit the creditor concerned is entitled to fair and objectively justified compensation for possible costs directly linked to the early repayment if the early repayment falls within a period for which the borrowing rate is fixed.

(3) Such compensation may not exceed -

(a) if the period between the early repayment and the agreed termination of the credit agreement exceeds one year, one per cent of the amount of credit repaid early, or

(b) if that period is one year or less, 0.5 per cent of the amount of credit repaid early.

(4) A creditor is not entitled to compensation -

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

(b) in the case of an overdraft facility, or

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