Even before a personal loan is granted the financial institution has the knowledge of what's the minimum profit they would make considering the length and also the different fees and interest rates. Chances are that things are going better for you and you decide to repay your loan, this would mean that the firm that issued the loan would get their money back sooner but would lose the profit from the interest. These penalty fees and fines are used to cover for the loss in terms of fees, the bank is certainly not going to lose money but you will get fined anyway. Take your time to review if your institution offers a free prepayment or if there is any fee or fine associated with it.