An existing bond can certainly be replaced by a new bond. With the current low interest rate, it can be worthwhile to replace an old loan with unfavorable conditions. By calculating the interest rate and fees, a borrower can save some money. The money is used to repay the balance of your old loan. Then you just have to pay the new lender.
Replace the loan with a new loan.
This is one of the easiest and most elegant ways to reduce your debt without spending a penny of your money: debt forgiveness. He wants to replace an old loan with a new one. However, you have to be careful at some points, as debt diversification is not completely unproblematic.
When replacing an old one with a new loan deal, you need to make sure that your debt load really drops. Because that is precisely the concern of debt debt. That only makes sense if you really reach the result. The problem is that in many cases it is not easy to judge whether debt restructuring is actually cheaper.
There are three reasons for this: Firstly, the prepayment of the old loan is not without consideration. However, there may be other hidden costs, such as the closure of an account that had to be created for the loan. With a longer loan term than the remaining period of the old loan, allegedly low interest rates can actually be higher.
Charge fees for granting a loan
The new commercial bank can also charge fees and charges for granting the loan. Other traps can also become an obstacle for you if you want to replace an existing loan with a new one. So it may be z. For example, you may find it difficult to obtain the new loan volume if you are turning to another bank than your current bank.
Offer that the new money house carries out the whole process of debt redeployment – so it really has the certainty that the funds will be used to repay the old loan. Even with a negative entrance into the school it can come to problems. To overcome these difficulties, it makes sense to introduce a second borrower or guarantor.
In this way, the house bank gets the necessary assurance that the loan volume is really repaid.