Every form of credit has a term. This can be, for example, 10 or 15 years, and then there may still be residual debt left over. These can then be refinanced and repaid in installments. After the repayment term you are free in your decision and can redesign the loan.
This means that you can change the type of loan (eg conversion into an annuity loan ), change the payment modalities (eg choose higher or lower rates) and there are usually two options:
- to change the bank or
- the whereabouts of a bank
The best banks and providers in Austria can be found here:
|First Bank||ING DiBa|
|to offer||to offer|
|from 3,000 euros||from 5,000 euros|
|up to 50,000 euros||up to 50,000 euros|
Repurpose loan or loan
Debt rescheduling involves changes that affect both sides: the bank and borrowers. Depending on interest rates and conditions, both sides must find a compromise and agree on debt rescheduling. This can sometimes mean lengthy negotiations with a bank. In the end, you as a customer should benefit from a rescheduling.
This is why rescheduling often makes sense
If another bank offers a cheaper interest rate, the debt can be shifted to it. This may be necessary if the monthly burden has just become too big. Maybe because you have received bad contract terms and are choosing a far too high interest rate. This increases the rate and the monthly burden is high.
Of course, it also makes sense to negotiate with your own bank first. Maybe a rescheduling is possible in-house, if you describe your situation there.
Otherwise, the debt would have to be relocated. And that, in turn, puts you, as a borrower, in a less than advantageous position because of course you need a lender. A new, foreign bank may not be courting you as a customer – after all, you are already in debt and are striving for a change.
The benefits of debt restructuring
If you have decided to reschedule, you will enjoy some benefits. If the interest rate is currently at a very low level, you can secure it. This often goes on for at least 10 or 15 years. And especially in low interest rates, the rescheduling is worthwhile, because with a new, very low interest rate you save a lot.
You pay less interest and can therefore significantly more share of the actual debt repaid . This means that at a constant monthly rate, the debt would be fully repaid much earlier. With a fixed interest rate you are then also worry-free, because at this nothing will change. So you can calculate the next years with certainty.
The disadvantages of debt restructuring
In the middle of the repayment term, it is by no means necessary for a bank to simply agree to rescheduling. The self does not benefit from it. If she agrees, that is a courteous accommodation.
In addition, the credit institution may well require that the debt restructuring be coupled to other conditions and reshape the contract. This could mean that you may be more limited in special repayments or have to accept other modalities.
As long as you, as a client, want something from your bank during the regular repayment period, you must hope for its goodwill. After the fixed interest period applies, of course, for both sides: Free hand!
You must pay particular attention to this when rescheduling
Do not make the same mistakes again and do not take over. A low interest rate should not hide the monthly rate. It should not be so high that, for example, a loss of a job becomes a real problem for you or your spouse. Calculate realistic.
You should also not finance the money abroad. Stay with a bank in Austria and finance where you have your own home. Even when it comes to financing a foreign property, it is still advisable to trust the bank in Austria.
Low interest rates
When rescheduling, make sure that you secure low interest rates for as long as possible. A fixed interest rate of only 5 years brings you back to the same problem in 5 years. Because the interest rates could have risen sharply until then and then you have nothing but to accept them. That may be very expensive. So do not make a hasty decision and think in peace which contract you choose. A rescheduling and the associated consequences tie you back for a few years to your decision.