Apply for debt rescheduling online
Why not reschedule, if you can save interest with it? A debt rescheduling loan is available in all credit areas. The balancing of the expensive Sitcosable is an option, the replacement of a more expensive installment loan or the bundling of several contracts in one or the rescheduling of mortgage lending the others. When does the rescheduling make sense and what should be considered?
The Sitco: Formless loan against credit agreement
A bank usually provides the account holder with a discretionary credit without a contract and without collateral. The Sitcosition will be based purely on the creditworthiness of the account holder. However, if the financial development of its client no longer seems fair to it, the bank has the option to reduce the credit line or to make it completely due. This means that the account holder must pay back the outstanding balance within a certain period of time.
A Sitco is a convenient facility. If at the end of the month, the cover is missing in the account to get hold of a bargain, the overdraft makes the purchase possible anyway. However, the overdraft also carries a risk. If the account holder is not careful, he slips with his account more and more in the target, lives practically only from the credit line and comes out of this credit spiral only with difficulty. Above all, it costs the dispatcher really money. Two-digit interest rates are still not uncommon.
However, before it comes to the point where the financial scope is completely limited, the countermeasure is recommended by a debt rescheduling loan. Well, this requires a credit agreement and the provision of collateral, but both should not be a problem. The salary assignment usually takes as security. For the self-employed, however, the number of providers for debt rescheduling is somewhat limited, as they have to resort to a bank that also accepts other collateral.
What is the advantage of a debt rescheduling over the permanent Sitco?
Over time, the account usage evolves into a mountain, which the account holder pushes ahead of him. Since there is no installment agreement, there may be a little bit of discipline in the end to get some credit every month. The debt rescheduling is forcing the monthly installment to be returned to the bank on a continuous basis. The borrower knows exactly how high the repayment will be each month, how long it will take for it to become debt-free and, in addition, saves a lot of money for the more favorable interest rates. Here’s an example of the benefits of the debt rescheduling loan:
|credit||2,000 euros||credit||2,000 euros|
|interest rate||10% pa||interest rate||3.9% effective pa|
|Cost for two years||400 euros||Cost for two years||80.81 euros|
|Residual debt after two years||2,000 euros||Residual debt after two years||0 euros|
Rescheduling the installment loan
The interest rate changes. Some borrowers find that they would actually have to pay less interest if they use a debt rescheduling loan to repay a higher-interest loan. Especially when multiple loans are serviced, this consideration may well apply. Before a debt rescheduling comes to fruition, but some points should be clarified:
- What is the residual debt at the time of the planned debt restructuring?
- Is a prepayment penalty payable or are full or partial special repayments possible (a rescheduling is nothing but a special repayment)?
- Has the credit rating changed adversely? This would nevertheless lead to an increase in the loan despite generally favorable interest rates.
Once these questions have been clarified, all that remains is to find the cheapest debt rescheduling loan. It is important that the borrower selects “debt rescheduling” in the loan comparison because the application routine may be different for one bank or another. The loans are requested, the rescheduling is planned.
With regard to the early repayment penalty, this is one percent of the remaining debt for a remaining term of the loan of more than one year, and 0.5 percent for a remaining term of less than twelve months.
Here is a sample calculation. The remaining debt amounts to 5,000 euros, 10 per cent per annum special repayment on the remaining debt is possible free of charge. The remaining term of the loan is three years. A prepayment penalty amounts to one percent to 4,500 euros, 45 euros.
At the end of the day, it is a rhetoric as to whether the debt repayment loan is actually the cheaper solution. In the selection, borrowers should ask multiple banks. The final individual interest rate is set by the banks only after the credit check has been completed. An impact on the Private credit do not have the different requests, because they are neutral condition requests.
The rescheduling of mortgage lending
This topic had hit quite high waves, as it was possible until recently, due to form errors in the revocation of the construction loan to replace this without prepayment penalty. In the case of mortgage lending, with one exception, an early repayment penalty is always payable if the loan is to be repaid during the fixed interest period. Annoyingly, this is about amounts in the four- or five-digit range.
The prepayment penalty will only be canceled if the fixed interest has been agreed for more than ten years. In this case, the borrower may terminate the financing with six months’ notice to the end of the tenth year.
While the cost of rescheduling a classic installment loan is absolutely transparent, the banks are brilliant at mortgage lending with total opacity. The Consumer Center recommends always having the calculation of the banks checked by a specialist.
The rescheduling loan for mortgage lending, however, entails something else. Mortgage lending is secured by a land charge order in favor of the financing bank. Anyone who remembers the purchase of their property knows that this process was associated with costs. The notary sent his cost note, the district court the fee notice. The same game would theoretically come to the borrower in a debt restructuring in duplicate. On the one hand, the existing mortgage would have to be canceled for a fee, and on the other hand it would have to be re-registered in favor of the new bank.
Fortunately, this process is completely superfluous in the case of a debt rescheduling loan for mortgage lending. Banks accept a notarised declaration of assignment for the provision of collateral. The cost of doing so is only a fraction of the cost of cancellation and re-ordering.
It is important that the borrower obtains all relevant data, residual debt, prepayment penalty and the possible percentage of a free special repayment in advance of the planned rescheduling. In addition there is the amount of the costs for the declaration of assignment. If these data are available, it is possible to calculate exactly whether a debt rescheduling loan is worthwhile in the case of mortgage lending or not.