A repayment loan can make sense if it combines multiple loan agreements to save costs or reduce monthly installments. With a loan for the redemption (Umschulden) there are so many different motives. The loan seeker does not always have the credit costs in mind, often it is just a debt rescheduling, so he gets a better overview of his finances. Many consumers have taken over financially through uncontrolled shopping. There is the mail order company, the online retailer, there are borrowed loans, all this is slowly but surely growing over a consumer’s head. Also, the individual rates are too high, so it can come to a sluggish installment. At the latest when the money in the account is pushed back and forth, when only a bill is paid, which is most urgent and when the first reminders emerge, then it is time for a loan to replace.
The loan to replace
A repayment loan is nothing more than a debt repayment loan, with multiple loans being pooled for a better monthly overview. Many banks offer debt rescheduling loans that give the loan seeker the advantage of not having to worry about formalities. For example, if a car loan to be replaced, the loan seeker must ask the transfer fee to the lender and apply for this amount a loan. Runtime extension may reduce monthly installments.
Many consumers buy spontaneously, first the washing machine, a month later a new television and sometimes the holidays are paid on credit. When taking out loans, there was a higher level of interest rates. Today, interest rates are low and many consumers expect to save on borrowing costs and pay less interest than before through a debt rescheduling loan. But if a loan is sought to replace, so that monthly only one rate is paid, the loan seeker should make sure that the rate is also lower than the previously paid installments. Such a rescheduling is appropriate for the borrower who wants to make the jump in time, who has determined that he has taken financial responsibility. Unemployment can also lead to a shortage of finances that requires a loan to pay off.
As long as the bank classifies the customer as creditworthy, a rescheduling is also granted. It can be problematic when unemployment has crept in. In this case, it will be difficult to get a debt restructuring. But those who have payment problems do not necessarily have to apply for a new loan, they can take the trouble to negotiate with individual creditors. There is the possibility of deferring installments or an extension of the terms. Also makes no sense rescheduling, if the debts have grown so much that the loan seeker no longer knows one. If there is already a negative private credit and he is no longer creditworthy otherwise, a rescheduling does not help anymore. In this case, he should seek professional debt counseling.
The way to private bankruptcy is the last chance a debtor can go. His debts are issued after a good conduct phase and he is virtually debt free. However, he must adhere to his requirements in the time to freedom from debt. To do this, it is necessary for him to compare his expenses to his revenues and to make a precise plan, when to pay his installments and how high they are.
Discipline and responsibility belong to this behavioral phase. Especially when a big mountain of debt exists, this type of debt relief is the only way.
Anyone who wants to take out a loan to replace it with different loans, but should pay attention to the prepayment fees of the banks. Here, new regulations have been issued by the legislature. If the loans were taken after 11 June 2010, they are, so to speak, new contracts. These can be terminated with a notice period of one month and also paid back prematurely. If the repayment term is more than one year, the bank may charge a prepayment penalty of 1.0% of the remaining debt. With a repayment term of less than one year, a prepayment penalty of 0.5% of the remaining debt is due. For old contracts that were concluded before June 11, 2010, the notice period is three months, the notice is only with the full loan repayment. These contracts have no limit in their prepayment penalties. If it concerns larger amounts of credit which are to be replaced, one should either check the costs themselves or have them checked by a specialist.