Often closed loans, especially a few years ago, no longer fit the current life situation of the borrower. That’s why we were often asked if there was not a way to reduce debt through a new loan and how it could work. With the many possibilities of the comparison of credit and conditions on finance market, it is indeed the case that there are interesting loan alternatives available. These can help to reduce debt faster and also save interest expenses.
The replacement of loans from the high-interest phase
In the daily newspaper and the television news is spoken again and again of a low interest phase and of a historical interest low. This should be used for their own loans and debt reduction. First check the loan agreement of your previous loan. Especially with newer loans, the possibility of a special repayment is explicitly pointed out. This means, in plain language, that you can save a lot of money even with the same maturity and the same repayment , if your new loan is a few percentage points cheaper than the original contract. It is important in this context that you specify the purpose of “replace an old loan”. Then the new lender knows that you do not want to increase the loan amount, but that you are aiming for a more favorable interest burden, that is, thinking economically. A free loan calculator can help here.
Adjusting the term saves a lot of money
Another conceivable situation is that they suddenly and unexpectedly have more money than planned. Then you can, for example, replace some previous loans with a special repayment and then conclude a new loan for the remaining balance. Here the saving is due to the shorter duration of the interest calculation and less to a cheaper interest rate. So you can align the new loan exactly to your wishes. Based on the desired, new monthly rate then results in the new term. With a loan calculator you can play through many variants here.