Often it is advisable to repay the existing installment loans, larger loans or even mortgages. It is not possible to say flat-rate whether re-debts make sense. With better conditions for the new financing, you can save a lot of money. Repoiling itself is not a big deal on both loans and mortgages. We will show you when it makes sense to optimize your loan or to repay and what to look for.
Repayment of the loans is made easy, after all, there is the chance to win a new customer at a change of institution. As borrowing also needs to take account of old loans, institutions often suggest replacing the existing loan.
However, before you terminate the loan with your house bank, you confront your bank with the new offer and the intention to change. If your bank does not give you an equal or better offer, and you intend to switch, then you must pay attention to the following:
- In the event of early rescheduling, the bank may charge a prepayment penalty.
- In the case of an installment loan, this amounts to a maximum of one percent of the remaining debt with a remaining term of more than one year. If the remaining term is less than one year, the Bank may not charge more than 0.5 percent.
- For a mortgage, calculating the prepayment penalty is more complex. However, there is no need for the high cost of a new land register, as a notarial assignment of one bank to the other is sufficient.
Credit comparison on the internet. In addition, inform yourself at your house bank.
Expect whether refinancing with the early repayment penalty is more favorable for you. If you want to pay off a lower monthly rate of your loans, you can also calculate exactly whether the new loan is not more expensive overall than the previous loans combined.
If you have found a favorable debt rescheduling loan that makes sense for you and you are in a low interest rate phase, then there is nothing standing in the way of rescheduling and the resulting savings.