This truism also applies to the historically low interest rates.
Savers are cursing the lack of interest income, but consumers with an ongoing credit agreement can take advantage of the favorable interest rates for early loan repayment and debt restructuring. With the help of the Verivox rescheduling calculator, every borrower can easily calculate the individual savings potential of early loan repayment.
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Low interest rates make rescheduling interesting
The Bundesbank statistics on interest rate development of installment loans shows that as late as October 2013, the average annual percentage rate of interest on loans with more than 5 years was 8.00 percent. Four years later, borrowers paid on average only 6.81 percent for a loan.
Loans for the loan repayment are particularly favorable
Even the Bundesbank statistics indicate savings potential. But it is still much cheaper, as the following example shows: A borrower who has taken in October 2013 to the APR of 8 percent a loan of 18,000 euros with 7-year term, pays a monthly installment of 278 euros. At the end of October 2017, the remaining debt of the loan amounted to 8,910 euros.
Now the borrower wants to take out a new loan and thus replace the expensive old loan and makes a credit comparison. Loans in the amount required for the rescheduling with a term of 3 years give the cheapest banks an effective two-thirds interest of 2.92 percent. This means that two-thirds of all customers receive this or a better interest rate.
Important tip for borrowers: In order to obtain a favorable loan interest for the loan repayment, you should definitely select the purpose of “debt restructuring / loan repayment” when making the loan request. Only then can the bank take into account in the credit check on the Schufa that the new loan merely replaces an existing loan and does not accept another one. This improves your Schufa score and gives you a better interest rate.
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Redeem Credit: These rules apply to rescheduling
Loans that have been closed after June 11, 2010, may be redeemed at any time without notice to borrowers. As compensation for the lost interest, the bank can often demand a compensation payment for early loan repayments.
The amount of this so-called prepayment penalty is regulated by law: If the remaining term of the loan is less than one year on redemption, the bank may not claim more than 0.5 percent of the outstanding debt. For longer maturities, the compensation for the early repayment of the old loan amounts to a maximum of one percent of the remaining debt. In order to replace the old loan agreement, in our calculation example, therefore, around 89 euros prepayment penalty must be paid.
If the conclusion of the credit agreement was before that date, then old law will apply. Borrowers can only repay such loans at the earliest six months after payment with a notice period of three months. Whether and to what extent a prepayment penalty will be due for the repayment of such loans is apparent from the individual provisions in the loan agreement.
Check conditions of the loan to be replaced
Some loans can replace consumers without prepayment penalty. If the terms of the old loan allow for free special repayments of any amount, early repayment is possible at no extra cost.
Unlike a installment loan, general loans can generally be repaid in full at any time without prepayment penalty. The refinancing of home and corporate loans is more complicated. In this case, our prepayment penalty calculator helps to estimate the cost of early rescheduling of your mortgage lending.
Step by step: calculating the savings potential of the loan repayment
For installment loans, debt rescheduling always pays off when the interest savings are higher than the compensation that consumers have to pay to the old bank when they replace the old loan. Borrowers should first determine the remaining debt, the remaining term and the amount of the early repayment penalty. From this they can deduce what the sum for the loan repayment must be.
With a credit comparison, they then check the available credit conditions for their new installment loan ( important: use “Rescheduling / Loan”). The easiest way to calculate the savings potential, if the new loan runs as long as the old loan would have gone. If the monthly installment for the new loan is lower than the rate for the old loan, the loan repayment is worth it.