When credit debts are referred to, this means the replacement of a current loan with a new loan. In order to terminate an existing contractual relationship prematurely, a loan is taken out with which the remaining debt is paid off.
Anyone who is interested in debt rescheduling usually has to use a loan agreement that was signed years ago and is characterized by significantly higher interest rates than is currently the case on the market. This can be a construction loan, but also a normal installment loan that has been taken out for a larger purchase such as a motor vehicle or a new kitchen.
In most cases, anyone who has to make an important purchase (e.g. the purchase of a motor vehicle or investment projects for the self-employed) cannot take into account how the current interest rate is to be classified; taking out a loan is often inevitable here. Perhaps it was also the case that you bought a property that you considered a special bargain and therefore deliberately ignored the then unfavorable framework conditions for taking out a property loan.
As the laws of the economy want, the interest rate fluctuates constantly. Interest on loans is also ultimately subject to the economy. This is ensured by the central bank, which increases the key interest rate in times of high inflation and lowers it when inflation is low.
What should you consider before taking out a debt rescheduling loan?
If you want to reschedule a loan, you have to consider some important factors in advance, such as the amount and remaining term of the loan, costs for early repayment and personal creditworthiness.
The first priority is to draw up a cost plan for the loan contract to be repaid. The most important indicators here are the current remaining debt and the remaining term as well as the prepayment penalty for the bank.
Ask your house bank or savings bank exactly what deadlines exist regarding the termination of the contract and how high the associated costs are. The aforementioned prepayment penalty – a payment to replace the loss of interest earned by the bank – is particularly important.
When does debt restructuring really make sense?
Anyone who is interested in a loan for debt rescheduling – as shown above – should compare the costs of the existing loan contract with the costs of the new loan. The basic requirement is that a positive result is achieved, otherwise the whole thing is not worth it in 99 percent of the cases.
99 percent because some of those affected are aiming for debt restructuring with the aim of extending their term. The aim here is to minimize the monthly loan costs (rate plus interest), even at the cost of a more expensive debt rescheduling loan. This variant may make sense in individual cases, but should only be considered in times of economic emergency.
As a rule of thumb, it can be said that debt rescheduling makes more sense the higher the total loan amount and the remaining term. As can be easily understood, the savings due to the lower interest rate are much greater than if a personal loan with a short term is to be replaced with only a small remaining debt.
If you want to redeem a car loan, you should check the conditions of the current loan agreement particularly carefully, since in the case of car financing the variant with a one-off payment at the end of the term is often chosen to replace the entire package. The comparison here is more complicated than with an installment loan, but your bank is certainly happy to explain the details to you.
Regardless of the amount of interest, the constraints should not be neglected. Regardless of whether it is a personal loan, building loan or intrasavings bank debt rescheduling – the option of early termination of the contract (here the circle closes …), free repayments and / or installment breaks play an important role depending on the individual case.
Debt restructuring of existing loans can also make sense for the self-employed. If you have to use an expensive long-term financing loan, switching to a private loan from Auxmoney can be a real alternative for the self-employed.
Summary of existing liabilities creates a new overview
It should not go unmentioned that existing loans are repaid in the sense of combining existing liabilities into a single new loan agreement.
The same general conditions apply here as already shown, but in addition, the order of personal financial circumstances plays an important role for many of those affected.
A confusing situation with numerous smaller installments, consumer loans etc. can quickly lead to a depression from one point in time to another. Here an order of circumstances, including, for example, a debt counseling center, can be the first correct step towards a better future.
If you want to redeem several loans, it may therefore be less important that the debt rescheduling loan is much cheaper because the focus is on the consolidation of the liabilities.
Refinancing real estate loans – forward loans as an alternative
On the other hand, anyone who relies on mortgage lending with variable interest rates should ask how long the current trend will really continue. In any case, experts expect the current interest rate policy to end in the medium term. If this is achieved, it can happen very quickly and many financing recipients will then face a real challenge.
Anyone who took out their real estate loan years ago faces another problem. At the moment, the same financing contract for the purchase of a property or a house ceteris paribus would be much cheaper, which is why you should reschedule existing building finance or alternatively take out a forward loan.
If you have to use an existing building loan, you should get the corresponding loan contract out of the drawer and check the conditions carefully. The next way should go to the bank, your goal is to adjust the terms of the mortgage to the current market conditions.
Not every bank gets involved in such renegotiations when it comes to home financing, but the chances are not so bad because the competitive situation in the banking sector has meant that every credit institution today has to strive to keep the customer in the future.
Debt restructuring possible without private credit checker?
The loan without private credit checker as a special offer for existing private credit checker entries is to be regarded as fundamentally independent of the purpose, which is why a debt change is possible despite private credit checker. The route with this variant leads you to the application to one of the credit intermediaries tested on our website. The mediator tries to find a bank that is ready for financing for their project.
In the case of debt restructuring despite private credit checker through a financial service provider, the offer is heavily dependent on your personal credit rating. In order for the whole effort to be worthwhile, there should in any case be sufficient working income that exceeds the monthly expenses as much as possible.
Debt rescheduling and taking interest savings with you
The only exception to the rule of thumb that a rescheduling of loans makes sense, especially with larger loan amounts and a long remaining term, are overdraft facilities on the checking account.
This is against the background that the overdraft interest is still disproportionately high, which is why rescheduling the overdraft facility is almost always worthwhile (if you use it regularly and on a larger scale).
Alternatives are a normal installment loan on the one hand, and a special call-off or framework credit on the other hand, in which the contractor is granted a certain credit line that he can freely dispose of. Regardless of whether it is a framework or installment loan – the interest for this is significantly lower than the overdraft interest for the current account at your bank or savings bank.