Debt restructuring? If not now then when? Low interest rates lure even the most comfortable debtor off the sofa to deal with a loan to settle old debts.
It can hardly get cheaper than today. Even though the Cream Bank remains at zero interest rates, current account holders are already feeling that the supply market is changing. Credit institutions are not (yet) turning the interest rate screw, but the fees for ordinary banking services are skyrocketing.
We want you not to miss the right time. Allocate old debts through refinancing. Take advantage of the current interest rate advantages, because nobody can predict when the tide will turn.
Loan to pay off the debt – preparation pays off
Debt restructuring can have a major impact on the financial situation of the household. Together with the loan to pay off the old debts, de facto debt relief can be possible. In addition, “pressure from the boiler” of monthly payment obligations can be taken. On top of that, debt restructuring creates clear structures for financial planning.
Without preparing the debt rescheduling measure, the “shot will unfortunately quickly backfire”. Instead of saving credit costs with debt relief, things can also turn out differently. It is important to check which old loans are actually suitable for debt restructuring. The thing is clear only with the overdraft facility and the payment obligations to credit card companies.
When does the debt restructuring not pay off?
Old installment loans reveal in the loan terms whether the loan is worth repaying the remaining debt or not. The law stipulates that every consumer loan may be repaid before it falls due. It remains open whether the loan repayment is free of charge. In principle, the bank may demand compensation for lost interest income. If she does this, it is usually not worth it.
It would be really pointless to reschedule a loan that was covered by residual debt insurance. For the residual debt insurance (RSV) insurance contributions were paid on average about 10 percent of the loan amount – per borrower. The insurance does not count back the unused money. Insurance coverage cannot be transferred to the loan to settle the debt. It’s just gone.
Everyone should see how much money that is. For example, if 15,000 USD were originally recorded with two people, the RSV cost 3,000 USD. If half of the loan is paid off at the debt rescheduling date, 1,500 USD in insurance costs will not be calculated back. A current loan to replace the old debt cannot be so much cheaper that the interest income compensates for this loss.
Plan long-term debt rescheduling – create liquidity
In many households with moderate incomes, the debt rescheduling loan is primarily intended to relieve the household budget. This can be achieved by merging old liabilities into a new loan. Nevertheless, everyone wants to get rid of the debt as quickly as possible. This almost automatically leads to the mistake of orienting the rate levels to the current liquidity requirement.
Nothing remains as it is. There will also be situations in the future where new credit becomes inevitable. If the maturity of the loan to pay off the debt was not measured in a future-oriented manner, the known problems now arise again. The installment burden is difficult to bear since an additional payment obligation has to be met. It would be better to plan long term and pay off quickly.
The debt rescheduling loan with small installments and the right of free repayment in any amount allows future-oriented planning. Only small installments have to be paid in a binding manner. But that does not mean that additional repayments should not be made. The special repayment is not easy without the obligation of binding installments, but there is a little trick for that.
Simply set up a standing order on a savings account. The amount of the monthly savings is based on the theoretically affordable rate. The difference is saved compared to the actually much lower installment payment. Money that is not in the checking account is not easily “pulverized”. Used for additional repayment, it can shorten the term to the originally planned level.
Debt restructuring with obstacles – professional help costs nothing
People are thinking intensively about debt restructuring if there is a risk of over-indebtedness. In this case, a loan to settle old debts can be a salvation or just prolong “suffering”. In this situation, it is important not to be dependent on your own experience and Internet guides. Professional help from outside leads to a neutral assessment.
We only recommend that you consult non-profit debt advice centers. The last thing people need in an overindebtedness situation are additional consulting costs or non-neutral advice. Non-profit debt counselors are full professionals. – The consultants are only paid for by non-profit organizations.
Debt rescheduling loan in difficult cases – serious loan brokerage
If the debt advisor considers the loan to be good enough to settle old debts, this does not mean that credit institutions approve it. The serious search for credit in difficult cases often turns out to be a Herculean task. In addition, the latent threat lurks to be “ripped off” by dubious mediators.
We recommend serious credit brokerage in difficult cases via Good Finance or Best Lender. Both portals are equally recognized as serious. Good Finance could offer more comprehensive loan repayments. The portal not only focuses on loans from private to private, but also arranges bank loans.