What should bring a rescheduling, once asked a visitor to a financial forum slightly desperate: Whether he paid off a new or an old loan, make in principle but no difference. He also heard from a friend who had once rescheduled that this had only caused problems for him and that in the end he had to pay more. He could therefore do little with the proposal to take a loan for a debt restructuring to improve his finances. Unfortunately, the scenario described often happens – it is a result of lack of information and too little preparation.
The meaning of a loan for a debt restructuring
Debt rescheduling is available in numerous variants. Often they are accompanied by a debt haircut and are then part of the path to bankruptcy. But this text should be limited to the simplest case of a loan for debt restructuring: More than 90 percent of completed loan agreements in the Federal Republic are organized as installment loans. In addition to the money you have to repay, the borrower incurs additional costs through interest and fees. The debt presses at the same time on the creditworthiness: The loan is noted in the credit bureau entry. In addition, the credit rating is reduced by the monthly repayments. Now, however, it often happens that you find loans after a while, which are cheaper: You pay less interest and fees and thus saves money. The fact that you also have to pay lower installments and the credit bureau noted total debt is better, also recovering the creditworthiness. The right credit for a debt restructuring is so very useful.
How to take a loan for a debt restructuring?
So, once you’ve found a loan that you can safely say that after taking into account all the possible costs, the repayment of this new loan is definitely cheaper, then it’s time to take that new loan as a loan for a debt restructuring. This is talked about in advance with the bank and can be fixed in the loan agreement that it is a debt rescheduling, because this simplifies the lending enormously. After having paid off the loan, you take the money and turn to the financial institution where the original debt exists.
There one makes use of the special repayment and pays back in this way the old loan in one piece. The proof that the old loan has been paid off must be provided to the new bank (in most cases, the bank that holds the older loan is not in debt restructuring). As a warning to be given to with: Presumably, the special repayment costs again fees: It should be informed before rescheduling, because if the new loan is more expensive than the old, then all the benefits turn into the opposite.