Whenever it comes to a cheap loan or cheap credit, the issue of debt rescheduling also comes up quickly. Debt restructuring is an option if, for example, the key interest rate has been lowered by the Lite Lender Bank (LLB) and banks can use it to refinance more cheaply. With cheaper refinancing, banks can also grant cheaper loans.
Get offers for cheap loans
So if you have taken out a loan that has a term of a few years and is correspondingly high that a debt restructuring is financially profitable, the first step is to get offers and look for cheap loans. Getting offers for a cheap loan is not as difficult today as it used to be. Due to the Internet, even smaller banks are now able to advertise and submit offers nationwide. Still, negotiating with 20 or more banks at the same time is a tedious task. There are experienced credit intermediaries or platforms that specialize in this and are in constant contact with the cheapest loan providers. These services are usually free of charge.
If the borrower has several offers on cheap loans, the next step is to ask the financing bank about debt rescheduling.
In order to understand the facts, you have to dig deeper into the credit system. When a bank grants a loan, it refinances itself via the Bundesbank or the Lite Lender Bank and in the same term as it grants the loan to the customer. For example, if a customer took out a loan with a 10-year fixed interest rate for a property purchase a few years ago, he received a loan interest of 3.3%. The bank refinanced itself with 1.3% for the issue of the loan. The customer has obtained an offer for a cheap loan, which is, for example, 1% and now wants to reschedule the $ 150,000 over which his loan is still valued.
The bank will certainly agree to the borrower’s request, but can claim damages. This is calculated from the interest difference of the old contract to the interest at which the bank can currently lend the money for the remainder of the fixed interest period. In banking jargon, however, the term compensation is called prepayment penalty. If the fixed interest rate in the above example would continue for 5 years, the prepayment penalty is calculated according to the current figures of around $ 20,000. This sum covers the damage caused to the bank by the premature loan cancellation.
Cheap credit and debt restructuring can always be expected with a sharp pencil
From the example shown, it is very easy to see that it can of course be worthwhile to repay a loan. But the prepayment penalty, which affects the cancellation of the old loan, should not be overlooked. A debt rescheduling calculator is a helpful tool. So provides a comparison calculator for a cheap installment loan.