Many a borrower who has been paying off his loan for a long time and still has many years ahead of him before completely paying off his debt may envy the currently quite low interest rates that his loan does not yet have. Because the low interest rate level has only existed for a few years. Before that, you had to dig deeper into your pocket and loans were granted on significantly less favorable terms.
In order to benefit from the better conditions, a debt rescheduling must be carried out. For loans with a long term, this is routine and in most cases also intended. Because banks also know that they can only keep their customers if they offer flexible repayment options. And that includes debt restructuring.
First the hard work, then the price
If you want to reschedule a loan, you can’t just go to a bank and request a new loan. In principle, this would work, but it would by no means exhaust the possibilities that debt rescheduling generally has.
Therefore, every borrower should obtain information before rescheduling that enables cheap and worthwhile rescheduling. In order to be able to optimally evaluate this information, the first step is to first extrapolate the remaining debt. Here it is worth contacting the current bank and asking what loan amount is still open.
The costs that would arise with the old loan during the remaining term must also be inquired. So the interest and fees that would have to be paid monthly. This is the sum that can ultimately be reduced through debt restructuring.
On top of that, a possible prepayment penalty plays an important role. If no debt rescheduling has been agreed in the loan agreement, the bank charges a fee. A kind of penalty interest, which is based, among other things, on the remaining amount of the loan.
The prepayment penalty for debt rescheduling
The prepayment penalty is an important component in debt rescheduling. It says something about whether the debt restructuring is worth it in the end. Depending on the type of loan, the prepayment penalty can vary.
With a simple installment loan, for example, this is made up of a maximum of 1 percent of the remaining amount. In the case of a real estate loan, the amount of the prepayment penalty is completely open and can be set by the bank as desired. On the other hand, if there is a rescheduling agreement, no penalty interest has to be paid and the rescheduling can be carried out free of charge.
The loan calculator helps
With this information in your luggage, you can then search for debt rescheduling. In the best case, a loan calculator is used, which can be found in different versions on the Internet. It helps with the quick analysis of the various offers and always shows the cheapest loan options.
The information gathered in advance can then be used to see whether a new loan would be cheaper or more expensive than the old offer. If a cheaper loan is found, it is important to secure it immediately. Because banks and savings banks can change their loan offers daily and adapt them to market conditions.
We therefore recommend sending a credit request to the relevant bank immediately. This will examine the request and, in the best case, agree to it. In such a case, the new loan contract must be signed before the old contract is canceled. This order is very important in order not to end up without a loan but with a high debt burden.
The new bank will then be happy to reschedule the debt. It transfers the money from the new loan directly to the old loan and offsets it. As a borrower, you don’t have to worry about anything and just make sure that the following monthly payments go to the new and not the old bank.