Did you rightly set some good resolutions for the new year? Are you sure your plans include spending less money unnecessarily next year and saving more if possible? Start with your finances today – the savings potential hidden in your old loan, for example, is unknown to many consumers and therefore gives the bank a lot of money every month.
Debt credit and save cash
In some cases, there is great savings potential in old, expensive loan contracts, which unfortunately many consumers often overlook: Almost all loans that were taken out more than two to three years ago are too expensive from today’s perspective! Thanks to the continuing low interest rate policy of the Cream Bank, interest rates for consumer loans in Germany have fallen steadily in recent years and are at an all-time low. A rescheduling of the old loan on a new loan at current conditions can therefore save a lot of money.
The savings potential offered by rescheduling an old liability for a new, cheaper loan at current conditions corresponds to the difference between the two interest payments that would be due in the future for both loans: For this, the consumer must first calculate which interest payments are due for the outstanding The loan amount of the old loan would have to be paid until the loan was repaid in full – this calculation compares the interest payments for a cheaper, new loan.
Pay attention to free special repayments before rescheduling
However, any fees incurred for the early rescheduling of the old loan should be deducted from the difference ascertained: some banks charge an additional fee for the early redemption and the resulting interest damage, the so-called early repayment penalty. If the bank does not allow free special repayment and therefore no free debt rescheduling of the remaining loan, the amount of the prepayment penalty must be deducted from the savings.
By the way: If you do not completely replace your liability and want to reschedule a new loan, use at least the excess Christmas bonus or a possible additional salary to make a special repayment. In this way, the outstanding loan amount is reduced and the interest payments as well as the total loan amount are reduced.