If you want to make good use of credit, you not only have to choose the right type of loan, but also have to check alternatives. Millions of citizens, for example, use their current account credit – at least once a year. However, this credit facility is only for a period of two to three months. However, if this type of loan is taken longer – for example over several years – then an installment loan would be the much cheaper solution at this point. According to the current state (04.2011), account users have to raise around 15 percent in interest, while the interest rate for a installment loan is only between eight and ten percent.Anyone looking to restructure debt can now choose from a variety of offers. Direct banks and the Internet offer a variety of possibilities, comparisons can also be accessed via the Internet. The most important detail in the credit comparison is the effective interest rate. This varies according to the loan amount and the term accordingly. So if you are specifically dependent on a loan amount of 20,000 euros and a term of 5 years, should not perform the standard comparison with 10,000 euros loan amount and 2 years. Anyone who attaches importance to special repayments should also incorporate this aspect into their condition comparison.
When is a rescheduling useful?
A large part of our citizens are now over-indebted – over-indebted, because one can not pay for the monthly credit installments, over-indebted, because the regular income is no longer sufficient and over-indebted, because one prevents an over-indebtedness not by a rescheduling. Should always be rescheduled if you are not already in an over-indebtedness. Anyone who tries to replace one or more high-interest loans with one or more low-interest loans or consolidates a large number of loans into one loan not only structures their financial position, but also saves money. For example, those who use a credit line for a longer period of time should switch to an installment loan because of the high interest charges.Existing loans or financings can always be replaced by other cheaper loans, and various loans can be combined into a new total loan. For example, loans can already be restructured if they are not yet due. Such a restructuring should be done if you want to save costs in the future or if you want to divide your financing differently. Especially in real estate financing, when it comes to mortgage loans, a shift is often useful. Especially when mortgage rates have dropped significantly since the loan was taken out.Also, borrowers who have a large number of smaller loans often lose track, so it may make sense to replace this large number of small loans with one or two major loans. Even such rescheduling leads to a great advantage because of the ultimately lower interest burden. Also installment loans can be reclassified in a meaningful way, if the interest of the new loan are more advantageous than the previous loan. In the rescheduling of installment loans, the borrower also has the advantage that no premature termination fees are due.In many cases, many small or medium-sized loans are also taken up, and these are always different financings. The car dealer offers financing for a new car, the new kitchen equipment is financed by the kitchen manufacturer, the big-screen TV or the living room furnishings are sold through the dealer, etc. It is not uncommon to quickly “own” a variety of different loans for everyday use things. Hardly anybody keeps an eye on the rate burden, which results monthly from the total amount. In addition, there are many different loan terms, different interest rates. This is where rescheduling into a large loan can make sense, because in addition to the savings in interest rates, an overview is also possible.
The rescheduling of a current account (Dispo) in a installment loan
The fact that in many cases a rescheduling from an MRP to a installment loan makes sense, is simply due to the nature of the Dispos, a loan that causes the most cost. This makes him the interest rates with 13 and 15 percent for the most expensive loan ever. A current account credit or overdraft facility is used exclusively to bridge short-term liquidity bottlenecks. However, this is considered by the least, so it is usually used on a large scale for years. Only very few, however, bear in mind that the high interest burden on the credit line is the result of the quarterly account settlement.In numbers, many may be noisy: Today is almost normal, a constant overdraft overdraft in an amount of 5,000 euros. At an interest rate of 12 percent, the bank customer would have to pay an annual amount of 600 euros. If this total amount is spread over 4 quarters, then the interest amount of 150 euros is relatively low. This in turn pushes the awareness of the customer, you just do not notice how expensive the loan is in reality. Although you can also earn debts with a installment loan, they are – unlike the disposition – continuously reduced with a much lower interest rate. In the above numerical example, at most one half of the interest on a installment loan would have been incurred. Projected over 10 years fell at the Dispo 6,000, the installment loan 3,000 euros in interest.A credit line can be rescheduled relatively easily, as there are no deadlines for repayment or specific notice periods. The customer only needs an installment loan – either at his house bank or another bank. Only the amount of the loan amount should correspond to the amount that is in the debit in the account. Once the loan has been approved by the bank, the money can be paid out in one sum and transferred to your own account. Thus, the MRP is balanced again. Now, of course, should not be made – as with many – the mistake of someday in the future to revert to the Dispo. Because then comes next to the Dispo and the installment loan to bear – a sure path into the debt spiral.Whoever redeems his credit line in order to reclaim it right away increases his total loan sum. From a legal point of view, no credit card should be circulated in this case constellation. Too large here would be the offense of deliberate fraud. Because debts must not be covered again with further debts, since it can be foreseen that the danger of a bankruptcy would already be pre-programmed.
The rescheduling of a real estate loan
Property owners are often forced to repatriate their real estate loan. The reason is quite simply the fixed-rate agreement, which ends sometime after a certain term again. At this point, funding must be reconsidered: Should it be extended or rescheduled? If, in addition, money is due from another source, this makes it easier to think about it: It comes to a real rescheduling, in which one replaces the loan early. Usually, the debt restructuring is usually problematic if the loan expires automatically. Something else applies to the rescheduling before maturity of the previous loan. Because then you have to calculate exactly: On the one hand, significantly better credit conditions must be offered, on the other hand, the borrower always depends on the approval of the lending bank. Because this is not obliged to fire the borrower prematurely from the financing.And if the consent is still present, then a fairly high penalty is due: the so-called prepayment penalty. The bank is very well able to pay for this interest loss due to the early release of the loan. Anyone who does not recalculate and compare here will not find that the amount of the prepayment penalty will end up being much higher than the amount of interest that would have been saved by rescheduling. The debt restructuring would have become a loss for the real estate owner. Here is an example: Credit Termination: Banks often expect wrong compensation for prepayment penalties!
Borrowers who cancel their loan before the end of the fixed interest period must recalculate. On the one hand, the expiry of the fixed interest period is usually 10 years. By paying a prepayment penalty, the bank will be compensated for the interest that it will not be able to recover after full repayment. When calculating the prepayment penalty to be paid, the outstanding interest payments that would have been incurred by the end of the defined repayment term are taken. From this amount, the amount that the bank would have earned with the repaid amount in the time to maturity is deducted. Reason: The capital from the repayment creates the bank either in securities or lends it immediately again.Who now repays his loan and keeps the property has very bad cards, because here is the bank in your calculation of the amount of free. Unfortunately the real estate owner has no right to terminate a real estate loan. Thus, he is always dependent on goodwill by the bank. Of course, the bank will agree to the termination, but it may demand in return the full interest that escaped by the early repayment of the loan. The bank does not have this generous option if the mortgaged property is sold. In this case, the former owner has the right to terminate his loan early. Although in this case a prepayment penalty must be paid, but this is limited in amount.In this context, the Federal Court of Justice (BGH) has also taken a position in the meantime. The judges determine the amount of the prepayment penalty in the event of a real estate sale as follows: The bank must deduct from the interest amount at least the amount that a mortgage certificate would provide within the same term. However, the bank is not allowed to pick mortgage Pfandbriefe with the lowest interest rates. Because this would make the prepayment penalty correspondingly higher again. Rather, the bank is obliged to use the capital market statistics of the Deutsche Bundesbank for the calculation. If the bank does not comply, action is required. However, banks are getting involved very quickly in these cases.