Debt restructuring by financing - that should note the

Debt restructuring by financing - that should note the


The debt redistribute may be useful. © Jorma_Bork / Pixelio

Which debt restructuring will take place in practice?

There are three main situations in which a debt restructuring by financing can be very useful, and is therefore also frequently carried out in practice.

  • In the area of ​​real estate loans, it is almost a daily occurrence that loans be rescheduled. At the latest when the fixed-rate period expires, the customer must extend the credit or take a new mortgage loan, which is basically nothing more than to refinance the loan.
  • The roll over can often be useful in the area of ​​personal loans, and for several reasons. One reason is that some debtors serve multiple loans and have partly lost track when and which rates are payable. Here it may be useful to include a new loan and replace with the loan amount all existing loans.
  • Very useful, but still used much too rarely in practice, the roll over of a negative account balance (current account) in an installment loan. For the checking account is overdrawn, customers pay Dispo interest or even interest owed, which often move at double-digit percentage range. The installment loan would be a much cheaper option here.

What advantages and disadvantages can be found at the new financing?

With the debt restructuring by funding some, some previously mentioned advantages, but also potential disadvantages are associated, you should also know.

  • There are two main advantages that can be connected to the roll over. On the one hand is the potential interest savings that can be achieved for example by the restructure in a more favorable credit. On the other hand, the production of the overview of the existing debt is also a very important point for many customers.
  • A possible disadvantage of Umschuldens may be included in the cost, which may additionally result from this measure. This is especially the case if a loan is terminated prematurely by the restructure. In the area of ​​the mortgage loan, the customer must give a prepayment penalty then often.
  • Should take place in a high interest rate cycle, the roll over, a further disadvantage could be that the new interest rates may be lower than the interest that had been used to pay the loan, the borrower.
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