Would you like to replace credit with credit? Do you see yourself facing a big task with many question marks or are you clear about the direction?
With information we bring you closer to the debt restructuring model that suits you and your ideas. Find out what is important for debt restructuring to really work, what problems might be lurking and how you can solve them.
Loan – Debt Rescheduling Goals
Repaying credit with credit ultimately means nothing other than rescheduling existing payment obligations. A successful debt restructuring can realize many ideas. Debt relief would be possible by saving future interest charges. An improved rate-bearing capacity would be possible through the readjustment of the total monthly rate. It is not uncommon for borrowers to “only” want a better overview of their payment obligations.
They want to make an installment payment and then be exempt from their ongoing loan commitments until the next month. Regardless of which of the above goals is aimed for secondarily, every debt restructuring must pursue a primary goal. A debt restructuring can only be classified as successful if it leads to debt relief within a reasonable time frame.
How easy it is to achieve this naturally depends on the real debt sustainability and the personal creditworthiness of the borrower. If the credit rating has already suffered noticeably, it is becoming increasingly difficult to reschedule at low interest rates. In this case, redeeming credit with credit can become an interest trap. Instead of paying back in a sufficient amount, only interest is paid. It is also often overlooked that not every loan is economically meaningful to reschedule.
Debt economically sensible
All borrowers who plan their debt restructuring themselves are at risk of making wrong economic decisions. Anyone who does not deal with credit transactions on a daily basis can easily overlook a clause in old contracts. For example, did you know that prepayment penalties for installment loans before June 1, 2010 are regulated differently from current loan agreements?
Or that credit insurance is included in the loan amount, but is not calculated back when a loan is repaid. People who redeem credit with credit give up their right to already paid insurance cover. Anyone who thinks that this is irrelevant is mistaken about the scope and financial damage involved in early loan repayment of insured loans. Around 600,000 loans are taken out annually with a voluntary residual debt insurance.
The voluntary credit insurance does not appear in the annual percentage rate. Otherwise, many would probably shy away from the step. About 10 percent of the loan amount is insurance contributions. With regard to the remaining debt, for a total claim of 10,000 USD there would only be 9,000 USD of old credit and 1,000 USD of RSV. This money is lost when borrowers replace credit with credit. The insurance coverage is canceled, although the credit risk remains in reality.
Any debt rescheduling is economically viable if uninsured loans are rescheduled without a prepayment penalty to a loan that is lower in interest than the old debt. Typical examples would be overdraft rescheduling or the settlement of other expensive short-term loans. Debting installment loans can make economic sense if it was neither insured nor if the early loan repayment was associated with additional costs.
Good advice is free – debt restructuring advice
Each debt restructuring is individually different. Getting good advice from experts should not be limited to advice texts on the Internet when it comes to difficult debt restructuring. It would make more sense to present all pre-sorted documents to a non-profit debt counselor.
Charitable debt advice centers are maintained by charitable organizations. In contrast to similar-sounding commercial offers, advice is really free of charge and neutral.
Mini rescheduling with great impact
People often think about debt rescheduling when the liquidity of the household budget causes problems. A slightly more expensive car repair or another unexpected bill should be paid, the only question is how? In principle, it is initially only about a current bottleneck that cannot be compensated for by the overdraft facility. Before rushing cannons at sparrows, it is advisable to solve the problems one after the other.
Mini-loans with fast payouts take the time pressure out of the situation to be able to replace results-oriented loans with loans. Instead of breaking everything over the knee, just to be able to pay the bill at the last minute, time is bought. Possible providers for a suitable loan solution could be bank. What the offers have in common is the promise to grant fast credit for emergencies, even with poor credit ratings.
Subjectively, bank’s offer appears particularly versatile. Initial applications should be applied in connection with Videoident, so it is faster per se. The company offers new customers 100 to 500 USD of credit with a 30-day term. The required interest rate lies in the area of high interest rates, so it is adjusted to the increased risk. Existing customers, after the first successful lending transaction, may even apply for a loan in 30 minutes.
Loan – Difficult Debt Rescheduling
Outside of the emergency situation, debt restructuring of existing loans can be pushed to a new installment loan. A good contact for all debt restructuring requests would be Good credit company. The credit portal enjoys an immaculate reputation for serious credit brokerage. Loaning with credit would be possible via the free credit comparison of bank loans and via private donors.
Debt restructuring with funds from private investors offers real credit opportunities in particular to people whose debt rescheduling would not be approved by banks. Debt rescheduled at fair interest, it does not matter who the money comes from, as long as the individual objectives can be achieved.