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Debt rescheduling

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When interest rates fall, many existing loans can be repaid and rescheduled at favorable rates. In most cases, borrowers can save money by rescheduling their loans or shorten the overall term of the loan. Read here what rescheduling means exactly, how you can reduce costs and what you should consider in any case.

Make the most of your savings potential with debt restructuring

With a debt restructuring, you replace one or more existing loans with another, more favorable one. The new loan amount is usually taken out with a different bank than the one to be replaced, but in principle this could also be done with the same bank. The purpose of debt restructuring is to reduce the overall cost of the loan by lowering the interest rate. Will the costs remain the same or even increase after the debt restructuring? Then, of course, the process is not worth it. As a borrower, you should therefore get a precise overview of all open liabilities before rescheduling your loan, compare loan offers in detail and go through all the options beforehand.

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Is debt restructuring worth it for me?

Are you paying off a loan that you took out a long time ago? Then it's worth using us's loan calculator to compare loan offers and reschedule at lower interest rates. Take a close look at the conditions of your current loans and check whether you can save money by rescheduling. Rescheduling with us makes sense especially if...

  • you are paying high interest on your loan.

Do you have the opportunity to pay off your expensive old loan at better conditions by rescheduling? By rescheduling with us, you as a borrower can adjust either your monthly charge or also the total term thanks to lower interest rates.

  • you often use your overdraft facility or are constantly in the red.

Despite the generally low interest rates, banks charge between 10 and 15 percent interest for overdraft facilities. If you refinance to an installment loan with a significantly lower interest rate, it can mean a significant cost savings for you.

  • You want to combine several small loans into one larger one.

Thus, you may not only save interest costs by rescheduling, but also improve your credit score, because the new loan replaces all the others. This is true - assuming creditworthiness - even if you need another loan in addition to current ones to cover a certain amount.

  • You need money for the high final installment of an existing loan.

Did you buy your car with balloon financing? With such financing models, a final installment is usually due at the end that far exceeds the amount of the current installment payments. Instead of accepting follow-up financing with high interest rates, you can often significantly improve the conditions and reduce the remaining debt by rescheduling with us.

What are the requirements for a loan or debt restructuring?

In order to be able to reschedule a loan, you must meet a number of requirements. These are usually the same as those for the initial loan application. This results in the following conditions:

  • Main residence in USA:

If you want to take out a loan or reschedule in USA, you must also have your center of life in the country and have a US bank account.

  • Age of majority:

In USA, only persons over the age of 18 are considered to have full legal capacity. A debt rescheduling or taking out a loan is therefore only possible once the age of majority has been reached.

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  • Permanent employment relationship:

If you have a permanent employment relationship, this has a positive effect on your chances for debt restructuring. If you are currently in the probationary period of a new job, you should wait for this before applying for debt restructuring.

  • Submit proof of salary:

Lenders check your creditworthiness mostly through your pay stub or pension statement.

  • Positive SCHUFA report:

SCHUFA is always queried when you want to apply for a loan. This also applies to a debt restructuring. The fewer negative entries there are in your SCHUFA report, the higher your chances of a successful debt restructuring.

What should you keep in mind when rescheduling your debt?

1.Check current credit agreements for deadlines

Carefully read through your loan agreement or contracts for the existing loans you want to pay off and check them for any deadlines that need to be met. This can influence whether a debt restructuring will bring you any financial benefits at all. In the case of overdraft facilities, on the other hand, there are no deadlines to observe; they can be settled in full at any time.

2.Calculate your remaining debt

First, determine the outstanding balance of your current loan or loans. This way, you can make sure that the new loan redemption can cover this residual debt and seamless continued financing is ensured. For this information, simply contact your bank where you applied for the existing loan or use an online loan calculator, for example. Here you can enter the amount of the original loan, the term, the amount of the monthly installment and the interest rate, and the online tool will calculate the remaining debt for you.

3.Take changes in your credit rating into account

Has your credit rating, that is, your credit score, changed since you signed the current loan agreement? Then you should definitely take this into account in your considerations. Loans are granted depending on the creditworthiness of the borrower, among other things. If your credit rating has deteriorated since then, this may result in higher interest rates. This, in turn, may mean that a debt restructuring is not worthwhile because you cannot benefit from low interest rates to the extent you would like. But if your credit rating has improved since then, that's all the more reason to consider rescheduling.

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Can I reschedule any loan at any time?

For you as a borrower, rescheduling with us is a good opportunity to save money - but for your bank it is a problem. Banks calculate with the interest income for the entire agreed credit period. So if you pay off your old loan early in order to reschedule, the bank loses this income. To make early debt restructuring more difficult or to compensate for the loss, they therefore in most cases demand some kind of compensation payment for the termination of a loan, the so-called early repayment penalty.

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