Especially real estate loans can have a very long term. 20 to 30 years are not uncommon here. During this time, a lot can change in the credit market. Among other things, interest rates for taking out a loan may go up or down. The latter is especially noticeable in recent years. Because at such a low level as currently, interest rates have long ceased to be.
No wonder that many consumers are considering replacing their old credit with a new and cheaper credit. Replacing credit with credit – calls this the layman, the expert, however, speaks of a debt restructuring.
Redeem loan with another loan – favorable interest rates and more attractive terms for the borrower
Anyone who owns a loan and uses it every month at the agreed rate knows very well that the financial market is constantly on the move and should therefore always be monitored. For this observation you do not have to be a professional and work for a bank. It is sufficient if one sits down once in a while at the computer, opens a credit calculator and creates a non-binding loan offer. And with the loan amount, which is still open for the current loan. If this non-binding and free offer gives you better conditions for a new loan, repaying a loan can be a good way to save a lot of money when repaying the borrowed money. Because even the smallest changes in the effective interest rate ensure that
Keep an eye on the costs
Now the banks and savings banks are not particularly pleased when a borrower wants to replace a loan with a loan. Does this mean that the interest income falls away and the customer may even change the bank. Therefore, the banks try to always combine a debt restructuring with costs. For example, there is a prepayment penalty that must be paid in the event of a premature repayment of a loan. The banks see this as compensation for the interest losses incurred by the early termination of the loan agreement.
But beware: Anyone who thinks of a possible debt restructuring when taking out the loan, who can get by on a loan with credit detachment without any additional costs. The option of early redemption can be agreed in the loan agreement. Also free special payments. If you do this, you will not have to spend any additional money on a rescheduling and you will also save money. However, it is always important that a corresponding clause exists in the credit agreement, as it can not be supplemented afterwards. It is therefore worth reading the loan agreement very carefully before signing it.
Always compare exactly
Before it can come to a loan with credit, it is important that a new matching loan offer is found. Here, the loan calculator helps, with the help of the cheapest offers can be determined. On top of that, it is worth telling the bank that manages the old loan that a debt restructuring is planned. So this will in turn create a loan offer, which can be quite worthwhile.
The old loan may only be terminated when the new loan agreement has been signed. A verbal or written commitment for a loan is not enough, as it can always be revoked. Only one signature on the loan agreement from both parties involved is binding. If the old loan is terminated prematurely and there is then no new loan ready for the transfer, this can have unpleasant consequences. Because then you have to look quickly for another financing option, which is not as good as the old credit in the worst case, so that the cost of repayment does not decline, but even increase.