Repaying a loan can be beneficial in certain situations, but far from inevitable. Among other things, borrowers often tend to blindly go to offers that appear to be cheaper to other banks without having compared them closely and checked their own situation – the result is high additional costs that could have been avoided. Generally, borrowers should consider debt restructuring in the following situations:
Loan contract ends
If a loan expires, it is possible for the borrower to change the lender without further difficulties. A normal processing time of approx. 4 to 6 weeks should be planned for this. If the contract is signed or concluded with the new bank, the land charge is assigned, but the banks make this out among themselves and the borrower has nothing to do with it. However, partial assignment / partial deletion of the existing land charge or entry of a new land charge are also possible.
Debt restructuring after ten years
In principle, as a borrower, you have the right to repay part or all of the loan after ten years have elapsed; the notice period is six months. With an assumed term of 20 or 15 years and an elapsed rate fixation period of ten years, the loan should be rescheduled at this point in order to take advantage of low interest rates. Personal information and property documents are required for termination or rescheduling.
Loan expires in 12-42 months
The borrower no longer wants to wait for the fixed interest period to expire, a forward loan can hedge against rising interest rates. Forward loans apply to loans with fixed interest rates for longer than three years. In advance, however, it must be ensured that the termination can also be carried out without any problems, after which there is a search for a suitable new credit institution – personal information and property documents are also necessary here so that the new bank can make a financing decision.
Fixed interest rate has not yet expired – prepayment penalty
A debt rescheduling is supposed to take place prematurely, the bank has to approve the premature termination. Termination can be made with six months’ notice, although the banks do not necessarily have to give their consent. The prepayment penalty is calculated individually by each bank.