Where can I best repay my debts?
but to start with the timely repayment of debt or, if necessary, to provide assistance that would allow the pair to repay or even liquidate the current loans. So, first, add up all the debts you have. A small reserve is included. What are good claims for, what are bad debts?
Interest reduction for quick settlement
If the fixed interest period of their old loan ends soon, they will now only half of the previous Zn …. Instead of the previous 6 percentage points, they do not even have to spend 3 percentage points per year on their follow-up loan. The interest rate trend gives them the opportunity to repay their debts a few years earlier than expected.
Sometimes the current interest rate is sufficient to fully repay the loan over the next ten years. For example, ten years ago, a homeowner took out a loan of $ 120,000 at an interest rate of 5.8%. So far, he has made a monthly installment of 800 $ (initial payment 2.2 percent).
If he receives the follow-up loan at an interest rate of 2.5 percentage points, the current interest rate of $ 800 will be sufficient to pay the debt in full within the ten-year fixed-interest period. An interest rate of 2.5 percentage points for ten years? Because many banks are still discounting the current low interest rates provided that the consumer pays the entire amount within 10 or 15 years.
Background: If the customer decides to pay more, the house bank will receive a large part of the loan from him long before the fixed interest period expires. Thus, it can receive the capital required for the loan on the credit market with a shorter duration than a standard loan with only 1 or 2 percentage points repayment.
For a shorter duration, the interest costs borne by the banks for refinancing are lower. It is currently particularly advantageous if the client initiates a follow-up loan as a full repayment loan with a ten-year fixed interest rate. Three quarters of the analyzed banks and intermediaries granted a loan at an effective interest rate of less than 3%. The homeowners had to pay for the top offers only 2.42 to 2.58.
Solve your old debt
Homeowners who do not need their follow-up loan for several years because the fixed-interest period of their old loan does not expire can also take advantage of this opportunity. They can already agree on the conditions for their follow-up financing with a forward loan (forward). The homeowner know today with the term loan exactly how much they will pay for their follow-up loan.
As the lead time to repayment of the old loan increases, so does the interest premium. For each additional day until repayment of the old loan, the credit institutions charge an interest premium of between 0.02 and 0.03 percentage points. A $ 100,000 bond with a ten-year fixed rate and four percent repayment is thus around $ 6,400 more expensive.
Therefore, a storage fee only makes sense if interest rates rise sharply. In a steady or falling situation, the debtors are stuck in a costly loan. You have to take it off at the specified interest rate. In our example case 6, the homeowner grants a forward loan with a ten-year fixed interest rate and a 4 percent repayment.
In three years he will repay 100,000 $ remaining debt from his current loan. PSD Nuremberg only charges an effective interest rate of 2.99% for this loan. DKB and SKG Banque offered the same loan at an effective interest rate of 4.43% – almost 50 percentage points more interest a year.