To reschedule credit during the term

Financing here, fixed credit there: in our day and age it is not uncommon for us to go into debt and let new purchases enter our lives with the help of a loan. Often it is not properly looked at the conditions at which the loan or financing is actually taken out. The big awakening usually comes only when it comes to paying the debts and it is found that a large part of the monthly installments are devoured by the interest. Then it is high time to think about repaying a loan during the term.

When a loan can make sense during the term

When a loan can make sense during the term

Those who are knee-deep in the overdraft facility, have to use creditors on the right and left and groan the credit card under the accumulated expenses, for which it is high time to think about a loan during the term. It is not uncommon for such a scenario to result in over-indebtedness, which is often only a few steps away.

But even if you have a fairly large loan that you have been repaying for several years and that will continue to accompany you for years to come, it can still be worth thinking about rescheduling. For example, if you have taken out a real estate loan or a car loan.

The conditions for debt restructuring are therefore very diverse and should always be considered individually. In general, however, it can be said that a loan is worthwhile during the term of debt rescheduling if you feel financial relief from the debt rescheduling. Be it because the monthly installments become lower due to a longer term, because you can combine several creditors into one creditor or because you simply find an offer that is equipped with a cheaper effective annual interest rate. It is not critical that a bank offers you debt rescheduling. You can also search for a better loan offer yourself and take debt restructuring into your own hands. You usually drive even better with this approach, because you can choose the new loan and conditions yourself and do not have to trust that the bank will make a lucrative offer for you.

It is not without preliminary considerations

It is not without preliminary considerations

Before you actually reschedule your existing loan, you should make some preliminary considerations and make preparations so that the debt rescheduling can be carried out without any problems. After all, you want to save and relieve debt with debt restructuring. And this will only happen if you take a very targeted approach.

Therefore, first check what the current remaining debt is. If necessary, you should contact the current donor or existing creditors to find out the exact figures. In this context, also find out whether the bank is demanding compensation for the early repayment of the old loan. If so, you have to offset this compensation against the savings in order to find out what real savings will actually result from the debt rescheduling.

Once this has been clarified, you can obtain current offers for a new loan. It is not important that the loan is in debt during the term. Orientate yourself with the required loan amount based on the outstanding amount of the old loan. If additional liabilities have accumulated, these could also be included in the new loan amount in order to leave only one creditor in the end.

If you have found a suitable offer, you should present it to the old bank. They can then consider whether they want to make you a similarly good offer or whether they release you from the loan. Banks often want to keep their customers because they earn good money from them. So it may well be that the old bank offers you a similarly good or even better offer for a loan during the term. If this is not the case, you can terminate the contract as soon as you have the money from the new loan in your hands.

Please consider the following

Record only the amount of credit that you really need. The new bank will certainly try to artificially drive up the loan amount. In addition, think very carefully about whether you really need residual debt insurance. This is only necessary if you call a very large loan in combination with a long term your own and want to protect your family and last but not least yourself with the residual debt insurance.

Overdraft facility credit | Get it quickly

 

Financially, it can get a little bit tight for everyone. Even if there is a good income, there will always be situations in life in which more money is needed than is actually available. This usually happens when unannounced expenses become necessary. For example, when a repair is due or an investment in the future is to be made.

If the additional capital is only needed for a short time, the overdraft facility can be used, which connects to the checking account and is available as a call credit. If a little money is needed, this can simply be obtained from the overdraft facility without having to apply for an additional loan. This makes a spontaneous decision possible.

However, the use of the MRP also has some disadvantages. The effective interest rate for the overdraft facility is very high and therefore also strains the available budget. Between 10 and 13 percent of the used disposable must be planned for this. If you then fail to quickly compensate for the overdraft facility, you pay a lot of money for the convenience that you enjoyed in advance. Therefore, many consumers choose to take out overdraft facility loans in the event of a long financial shortage.

Inexpensive and quickly taken up – the installment loan

Inexpensive and quickly taken up - the installment loan

An installment loan is best suited for settlement as a loan for overdraft settlement. The installment loan can be adjusted exactly to the required loan amount, has no upper limit and is also not earmarked. You do not have to tell the lender what you want to use the money from the loan for. However, if you need to borrow a large amount, the question of how to use it can come up anyway. Here you should make a vague statement and not be too “questioned”. Banks do not like to spend money to give the borrower the opportunity to settle debts. Therefore, try to name another purpose or to leave the question open. Not that you get the impression that you are not creditworthy.

You already get a credit for overdraft facility compensation in the form of an installment loan on very good terms. If you have a good credit rating, it may well happen that the effective interest rate is below 3 percent. In order to be able to make such a bargain, you should compare different offers with the help of a comparison calculator. We also recommend that you do not take out the overdraft facility loan from your house bank, since you are very likely to use the overdraft facility and the house bank could take advantage of your “emergency situation”. It will most likely not make a good loan offer to you since it has little interest in making up for your overdraft facility. After all, it earns well from the interest you have to pay every month. And the installment loan goes hand in hand with a significantly lower interest rate.

Pay attention to flexibility

Pay attention to flexibility

If you decide to use a credit to offset the overdraft facility, you should always ensure that you have sufficient flexibility in repayment. Even if it is very likely that it will only be a small loan that you have to apply for as a credit for the overdraft facility, it is important that you keep as many options for repayment as possible.

It is always very nice if you can make free special repayments. These allow you to flow additional money into the loan. As a result, you can pay off the loan faster and pay less interest.

If you are moving in the context of a small loan, you should not let any residual debt insurance pamper you. Better find a guarantor who can help you if necessary. A residual debt insurance only costs a lot of money and makes your loan unnecessarily expensive.

Also make sure that you do not use the overdraft facility again during the repayment from the credit to the overdraft facility and if possible do not incur any other debts. It is better to clear the current debts first before increasing the existing ones, so as not to end up in overindebtedness. In that case, there will be no credit to help you get out of this predicament.