Anyone who has a loan and has to pay high interest rates can undertake the so-called rescheduling and replace the existing loan with a cheaper loan. A rescheduling can also take place during the construction financing, when the debit interest period has expired. Debt rescheduling is about finding a cheap bank, as it is often associated with costs that are not just covered by the new loan, because the goal is to save money in the future. The rescheduling can be replaced not only a loan, but also several unfavorable loans.
1 The purpose of debt restructuring
The purpose of debt restructuring is basically to repay one or more high-interest loans with a single credit facility. For the new loan, which serves for the replacement, completely different conditions can be agreed regarding the rates and the term.
Tip: A rescheduling makes sense only in times of low interest rates, because the goal is to save in the future and to pay lower interest rates. The rescheduling must be planned thoroughly, because often costs for it.
The borrower must pay a transfer fee to the bank, which depends on the loan amount and the bank. This transfer fee is called prepayment penalty. Repayment is not always possible, but certain rules apply.
2 What needs to be considered when rescheduling
For a installment loan, a borrowing rate is set in the credit agreement, which does not change during the entire term. Special rules apply to the rescheduling of mortgage lending, as this is a loan with a very long term and a very high loan amount.
For construction or real estate financing, a borrowing period is agreed in which the borrowing rate does not change. If the debit interest period has expired, the loan can be rescheduled; the borrower can apply for the loan from another bank. If the borrower wants to repatriate his construction loan during the debit interest period, this can be very expensive because the banks charge a rather high prepayment penalty; In addition, notary fees or district court fees will be charged. If you want to repost a building loan, you can use the building loan calculator on the Internet to check whether the debt restructuring during the debit interest period is worthwhile.
If the debit interest period has expired, there are no costs for the rescheduling, the borrower does not have to pay a prepayment penalty. For various loans, a variable interest rate is also agreed at the time of conclusion of the contract, which can be converted into a fixed interest rate. If the borrower makes use of it, it is also a rescheduling.
3 The forward loan as a special form of debt restructuring
If you want to repost a building loan, certain rules must be observed. If the interest rates are just cheap and the lending period has not yet expired, you can secure favorable interest rates by opting for a forward loan, which is a peculiar feature of debt restructuring. A forward loan can be requested up to five years in advance, but it should be noted that a commitment fee is charged for each month before the start of the term. If you want to apply for a forward loan, you should compare the terms exactly and calculate whether such a loan is worthwhile at all. The deployment fees must be covered by the savings made with the forward loan, and there must be additional savings.
If you want to avail yourself of the forward loan before the end of the debit interest period, the prepayment penalty also accrues. A rescheduling with a forward loan is therefore not always favorable. It may be cheaper to reschedule if you decide on the follow-up financing that follows after the debit interest period.
4 What is a prolongation?
If you have taken out a construction loan or a real estate loan and have agreed on a debit interest period, it is not always necessary to reschedule it to another bank. The bank in which the loan exists submits to the borrower in good time before expiry of the borrowing period an offer for the continuation of the loan, which is referred to as a prolongation.
This prolongation, too, is a form of rescheduling, it takes place on other terms than the previous loan. The borrower has the opportunity to agree with his bank a new term, other rates and other interest on the remaining debt. Even if there are no costs for rescheduling at the end of the debit interest commitment, it may be useful to obtain several offers for rescheduling in order to compare the conditions and to check whether the rollout makes sense.
5 Find the right credit for debt restructuring
If you want to repay a loan, you should use the credit comparison on the Internet to secure the best terms for debt restructuring. If you want to repost several loans, just a single loan is enough. One writes in the input fields of the comparison platform the amount of the existing remaining debt, because in this height the loan for the rescheduling is taken up. Now you set the desired term to get the amount of rates and interest rates for the rescheduling loan at the individual banks.
The rescheduling of smaller loans is easy, but for larger loans such as construction loans and real estate loans, the rescheduling calculator should be used on the Internet. If there is still a high residual debt, you should request offers from several banks and compare, because for construction and real estate loans other conditions apply than for normal installment loans. The rescheduling is in most cases a installment loan, which is repaid in equal monthly installments.
6 This is how the rescheduling takes place
If you want to replace a loan, the debt restructuring is usually not difficult. One must first apply for a loan from another bank, the bank with the best terms can be found on the loan comparison on the Internet. The application for the loan can be made online; However, you have to respect the notice period for the existing contract. The intended purpose is “debt restructuring”. If the loan is granted for debt rescheduling, you can cancel the existing loan with the bank and replace it with a sum through the new loan.
If you have several loans that you want to repay, you pay back every single loan in one sum. If you want to repay a larger loan, the rescheduling looks a bit different, because you have to timely before the end of the debit period to seek a new loan for debt restructuring. If the rescheduling takes place before the end of the debit interest period, the timely termination must be observed, as well as the prepayment penalty in the rescheduling must not be forgotten. If you have found a loan for the debt restructuring of a construction loan, the existing loan can also be replaced with a sum.
7 Conclusion: The most important thing about rescheduling at a glance
- The purpose of rescheduling is to relocate existing debt with unfavorable terms into a single (cheaper) loan.
- For construction loans and real estate loans, separate terms and conditions also apply to the rescheduling.
- Special forms of the debt restructuring loan are, for example, the Fordward loan or the prolongation (ie the term extension).
- In any case, the applicable notice periods of existing loans must be observed.