Legitimate debt, refinancing debt with low-interest credit can be a savings model. Small installments, with a newly adjusted term, relieve the household budget. Expensive loans pay off faster thanks to the interest rate relief.
Our credit guide for debt rescheduling shows which debts are particularly urgent, what you should pay attention to, which offers fit the credit rating.
Loan for debt – expensive loans are a priority
Low interest rates have dominated the credit market for years. Only a few people today still pay an installment loan, which was concluded before the interest rate decline. The idea of using credit for debt to lower the personal interest burden is no longer aimed at old installment loans. Currently expensive debt is taking place in short-term financing. It is less about short-term debt than more popular forms of loan.
The overdraft facility and the overdraft facility for credit cards are designed as short-term financing, but are rarely repaid quickly. Almost all credit institutions can be rewarded generously for the courteous handling of these loans. In 2014, Stiftung Warentest determined an interest rate of 17.50 percent. During our short research in the March 2016 accounts, we found an overdraft facility with an effective interest rate of 16.88 percent. Our survey is of course not representative. But the interest rate deposited in the example was calculated for someone who otherwise has no debts.
The interest claim shows how urgent it is with a loan for the debt if the current account is overdrawn. From official statistics it can be deduced that the “average account overdraft” owes his house bank about 3,000 USD. This results in an effective interest claim, once based on the above-mentioned savings bank disposition, of $ 506.40 a year. Well, if you overdraw your account, you have to pay. But, the amount of the interest claims can save a lot of money.
Debt rescheduling – small loan is really worth it!
Inexpensive, uncomplicated and quick to finance, the small loan from the loan comparison is almost a trademark for this. If a credit of 3,000 USD were required, the optimal term would be between 12 and 36 months. Small installments of 86 USD per month are based on our calculation example to relieve the household budget of interest. With a term of 36 months, the bank only charges 92.08 USD in financing costs. Rounded up, the total corresponds to $ 30.70 annual interest costs.
For these financing costs, the house bank does not even offer the overdraft facility of 3,000 USD per month. The house bank collects interest of 42.20 USD per month. With a loan for the debt, in our sample calculation, based on current real figures – $ 475.70 – can be saved.
The procedure is not complex in order to save interest. Simply select a good credit comparison calculator, compare the loan of your choice at an interest rate independent of creditworthiness and sacrifice 5 minutes. Because applying for the installment loan online and fulfilling the legal requirements for a binding credit application using the videoident procedure works almost in real time. Depending on the credit provider chosen, the overdraft facility may go down in history 48 hours later.
Debt rescheduling – creditworthiness for lending
The majority of regular banks today determine creditworthiness for lending using the score. Individual criteria and empirical values from comparison groups are incorporated into the personal score. Unfortunately, nobody is entitled to a detailed breakdown of how creditworthiness was calculated in individual cases. The weighting and precise breakdown of the factors is part of the trade secret of the providers. In order to assess their own creditworthiness, everyone can request information from credit bureau once a year. Alternatively, it can only be estimated.
The score definitely predicts the likely credit default if there is a negative credit bureau entry. A bad score must also be assumed if the employer is known for “hire and fire”. Temporary workers and temporary workers are particularly affected by this problem. As far as is understandable, existing, punctually paid credit obligations do not automatically have a disproportionately large impact on creditworthiness.
As long as the personal credit line, calculated from income and payment obligations, is not reached or exceeded, regular debt restructuring is not a problem. As a possible provider of credit for debt, any good credit comparison shows a variety of regular loan providers.
If the creditworthiness is limited, there are two provider-side problem solutions. The debt rescheduling would be financed through commercial “risk financiers” or through private donors.
Debt rescheduling – how it works
Risk bank credit of the modern age differs from the offers of the past. No commercial loan provider is taking any major risks with consumer credit. But lending is conceivable if the negative score can be invalidated. It is possible to refute the predicted loan default if the loan check proves that the loan has been secured by hand and with supporting documents.
Credit for private debt works a little differently. Banks must not take high credit risks; they have been obliged to do so by law. However, private investors do not include the legal requirement. Each investor is free to decide how high the risk taken may be. Donors approached through Cream bank or Best Bank are allowed to share the risk of default. You submit bids for partial financing.
A loan for the debt is only considered approved once sufficient bids have been submitted and accepted by the borrower. A central bank acts as the central contact for both sides.