For example, if you bought a car, a television, or even a home several years ago, these things were often financed with one or a few loans. Since these were concluded at a much higher interest rate, the rates are too high. If you were to reschedule existing loans in the current low-interest rate phase in Germany, you can often save a lot of money.
When it is worth repaying the loan
If a cheap debt for debt restructuring has been found, it is important to work out what amount of debt is really saved before this happens. Practical debt rescheduling calculators are helpful to determine the exact savings potential. If the loan was applied for before June 11, 2010, it is advisable to check the existing contract for the amount of the prepayment penalty.
A debt rescheduling is only advantageous if the fees of the debt rescheduling loan, taking into account the prepayment penalty, are significantly lower than these costs of the old loan. Basically, the longer the existing loan runs, the higher the remaining debt and the higher the difference between the new and the old interest rate, the more a debt rescheduling pays off in the following situations, for example:
- You overdraw the current account permanently and may not be able to get down from the minus even if you receive your wages. The interest rate on the overdraft facility is significantly higher than the installment loan. That is why it is always advisable to convert debt from overdraft facility to consumer credit.
- The idea is to borrow more money, but not to take out another loan. Especially when you have to pay several monthly or quarterly installments to different creditors, it is important not to take out another loan from another lender. The best thing is therefore to combine all remaining debts from the current liabilities into a total loan and to apply for the new amount at the same time. Even if the new loan was increased by an additional amount, the total burden of combining all the loans is reduced enormously.
- Because of a wage increase, for example, a higher income is available, through which higher rates are now affordable. If the increased, regular income is sufficient for all remaining debts to be fully paid out, it must be checked whether and how high the prepayment penalty will be. If the repayment is free of charge, the loan should be canceled. This saves you the interest burden for the remaining term and is debt-free again. If the remaining debt cannot be repaid in full, it is possible to replace the old loan with a new loan with a shorter contract term.
How to proceed properly with debt rescheduling
First of all, it is necessary to determine the total amount to be included. This means the amount of all remaining debts from the current loan and any new requirements that may be required. Usually, this data can be found in the repayment plans for old loans. It is also important to be informed about the fees that arise if the loan contracts are terminated prematurely and what notice periods must be observed before a new loan is taken out.
Furthermore, as a borrower, you should be clear about your wishes and goals. Does it make sense to reduce the loan rate by extending the term and low interest rates in order to create financial scope? Or do you want to be debt-free again faster and even shorten the loan term? With these lines of thought, it makes sense to find the right loan offer in a targeted manner. Practical loan comparisons on the Internet make it possible to get the first overview.
However, because many loans depend on their creditworthiness, prospective customers should obtain at least three specific offers in writing so that the terms and conditions can be compared directly. It is crucial to compare not only the interest, but also other components of the potential loan contracts, such as special repayments, installment breaks or free early repayments.
In order to replace the costly loans with a cheap debt rescheduling loan, the rescheduling should also be specified as the purpose when a new amount is included. For example, the new bank knows that the current loan rate can be replaced by the new monthly rate, for example, and that the previous bank will no longer exist due to debt restructuring.