What do you expect from the interest rate trend in the coming years? A further decline in the key interest rates for credit and positive interest rates for borrowing are unlikely.
If you want to reschedule credit cheaply, the current time would be well chosen. Consumer interest rates seem to have bottomed out. We support your debt rescheduling request with information on how to take advantage of debt restructuring, what to look out for and offers that match your personal credit rating.
Debt cheap debt – good reasons to act
Current loans, as well as insurance contracts, should be checked regularly. Changing individual living conditions as well as changes in the framework conditions are no longer optimally captured by old contracts. People who reschedule their credit at the right time expect measurable benefits. – Advantages that go far beyond the framework of the “penny pinchery”.
A debt rescheduling can accelerate the desired debt relief by perceiving current interest rates. The bottom line is that lower interest rates reduce the capital actually to be repaid. The debt rescheduling would also be advantageous because the new loan will be adjusted to the individual budgetary situation. In the past two years, wages and pensions have increased significantly as inflation devalued the money.
Workers have more money in their pockets. A portion of the real wage increase could be used to pay off existing debts faster or to fulfill greater wishes. If a bigger wish is on the agenda, the repayment should of course not strain the household budget. Rescheduling existing loans at low cost offers the opportunity to gain additional liquidity for new acquisitions without increasing the monthly installment burden.
Changed framework conditions – advantages for borrowers
Interest rates for medium and long-term loans have changed in recent years. The ECB distributes money for borrowers with good credit ratings through the system of credit institutions, as if the last day was the sale of the property. No reliable forecast predicts that interest rates could rise again in the foreseeable future. Accordingly, banks are happy to grant long-term loans.
As less solvent borrowers take out a loan despite favorable interest rates, the additional loan terms are changing. The offer for free special repayments of any amount or an optional payment break is increasingly found in the credit terms. Debt cheaply now, save interest and at the same time benefit from improved loan terms is the order of the day.
Debting current loans – recognizing pitfalls
Most debt restructuring is planned by borrowers themselves. Unfortunately, they use the “lawnmower method” too hastily. You just look at the APR and put the old loan on the list. This procedure would only be suitable for short-term loans. Debting short-term credit could almost be a hallmark of – cheap debt rescheduling. However, it is worth taking a closer look if existing installment loans are refinanced.
In most cases where credit insurance was taken out, residual debt insurance (RSV) was optional. The insurance contracts were not recorded in the annual percentage rate, but they are part of the remaining debt. Unlike in the case of interest included in the loan amount in advance, the insurance contribution is not calculated back in the event of early loan repayment.
Insurance cover and unused premiums are lost, although the credit risk, now borne by the new debt rescheduling loan, continues to exist. It is definitely worth asking the calculator how much money would be given away. On average, up to 10 percent of the remaining debt – per borrower – can be expected for the insurance premiums. That is more money than any interest savings could bring back.
Debt restructuring with poor creditworthiness – realistic interest rates?
Regaining liquidity for the household budget is one of the most important reasons for borrowers with a slightly poorer credit rating. With regard to the monthly installments, this calculation is usually very simple. The debt rescheduling loan is a new loan, so the fixed monthly payment is determined by the newly selected term. However, reducing the rate increases the effect of compound interest.
At first glance, cheap debt rescheduling also seems realistic for a bank’s risk loan. However, only if the runtime is not exaggerated. Paying interest rather than repaying interest at low rates shifts the problem of existing debt but does not solve it. Risk financing from banks has also fallen in interest rates, but unfortunately not to the same extent as with regular loans.
The reason for the lower interest rate decline is indirectly due to the increased credit risk. Credit institutions that take a higher credit risk have to show more equity. The money usually comes from investors who invest money very long-term. Investors who closed 10 years ago, for example, would be stupid to realize their investment. The currently lacking investment opportunities and the fall in interest rates therefore have only a minor impact.
Don’t just look at bank loans:
Serious risk credit could also come from private lenders. Many savers are desperately looking for safe and fairly interest-bearing investments that failed to conclude long-term investments in good time. Helping others through Smava, for example, in order to be able to reschedule their loans cheaply, is increasingly recognized by small savers as a safe investment.
In contrast to the risk loan via banks, the low interest rate level for investments has no delay. Debt restructuring in difficult cases is therefore often cheaper for borrowers than through a bank.