If an old debt is to be converted into a new one, one speaks of a loan debt. You take out a loan to pay off an already existing debt. This procedure is intended to exonerate indebted persons financially so that they can become debt-free in the foreseeable future. Often it is because of too many creditors no longer possible to serve all individually. The fact is that creditors often do not get involved in too low repayment rates. Many also often demand immediate repayment and no longer accept installment payments. Then, reposting the loan can be a potential problem solution. In addition, existing loans can be combined into one to save interest.
Combine existing liabilities
The goal of a loan remubbing is to repay several liabilities immediately and to merge them into one. Thus, all existing creditors in one together. It does not matter which liabilities exist.
When is a loan reminder useful?
Sometimes you lose track and eventually find that you can no longer carry all incoming liabilities. Then the debts rise quickly, because dunning costs and court fees cost a lot of money, which has led many people into the debt trap. With step-by-step payments, many will not get along, especially if there are several debtors of this kind. To be able to make a clear cut, there are the loan repayments. That is, all outstanding claims are settled with a loan from the bank, the debtor is thus debt-free, as far as the previous creditors are concerned. The credit bureau changes accordingly.
Now the debtor can individually negotiate his monthly repayment installment with the bank and adjust his income. The advantage: There are no further reminder fees or other additional costs, if the current installments are paid.
Special rescheduling of current loans
Often it also happens that no debts or debts have been made, but simply run several loans simultaneously. Then it might still be useful to combine all loans into one. For example, when you are in a low-interest phase and can replace obsolete interest rates by cheaper. BUT: Before the refinancing should be calculated exactly. The cost of rescheduling costs money and should accordingly not be higher than the savings by the lower interest rates. If the conditions are more favorable, the debt restructuring works relatively straightforward.
Correct approach to loan repayment at a glance:
- Determine the conditions of existing loans
- Create overview
- Determine current interest rate, wait for low interest rate phase
- Obtain and compare loan offers
- Determine effects of the installment loan (prepayment penalty, etc.)
As a result, liabilities are not always tied to the contractually agreed periods, as can be seen, there are various gaps. Of course, lending is not always worth the lump sum, only if there are many claims and they are subject to bad interest rates. Who caught a low interest rate and a loan remission is really worth it, can save quite.
With existing debts, the rescheduling can stop the ever-increasing default fees and the borrower can pay off his debts. To obtain such a debt rescheduling, however, various requirements must be met.