UmschDebt restructuring is an important issue for many borrowers. Particularly when interest rates are high and long-term commitments are involved, debt restructuring can provide significant financial relief. But what exactly is debt restructuring and how does it work? Take advantage of a free initial consultation with a lawyer. Because every case is always an individual case, regardless of whether you have a Credit from Consors Finanz or another bank. The consumer protection rules and regulations apply to all banks.
Debt restructuring means that an existing loan is replaced by a new, usually cheaper loan. This can make sense for various reasons:
- Reduction of monthly installments
- Reducing the total cost of the loan through lower interest rates
- Combining multiple loans into a single loan
However, before you decide to refinance, you should carefully consider whether it is worth it for your individual financial situation. There are several factors to consider, including possible prepayment penalties and the terms of the new loan.
Repay early? How does it work?
Paying off a loan early, also known as prepayment, can also be an attractive option to save on interest costs when refinancing. These compensations serve to compensate the lender for the lost interest income. This often happens when you sell the house or apartment.
Steps to repay early:
Review loan agreement: Make sure you know the terms and conditions for early repayment. Pay particular attention to any early repayment penalty clauses.
Contact lender: Contact your lender and ask for the exact amount of the prepayment penalty and the outstanding balance.
Secure financing: Make sure you have the necessary financial resources to make early repayment.
Obtain written confirmation: Have the early repayment confirmed in writing to avoid misunderstandings.
Attention: Prepayment penalty for real estate loans may apply
Prepayment compensation is an important point, especially for real estate loans. Special legal regulations apply here, in particular § 489 BGB, which regulates the conditions for early termination of loan agreements. According to § 489 BGB, you have a special right of termination with a notice period of six months after ten years have passed since the loan was received in full. This means that terminating the Consors Finanz loan can then work without any problems.
Calculation of the prepayment penalty:
The prepayment penalty is calculated based on the remaining term of the loan and the interest difference between the agreed interest rate and the current market interest rate. It is advisable to Have the calculation carried out by an expertto make sure the amount is correct.
Did Consors Finanz meet all requirements?
Another important aspect is the question of whether Consors Finanz has provided all the required information in the loan agreement correctly and completely.
If you find that information is missing or unclear, you may have the opportunity to take action against the loan agreement. experienced lawyer can help you check your rights and enforce them if necessary.
In any case, you have to be careful with a secondary mortgage
Particular caution is required when refinancing or early repayment of loans secured by a mortgage. Additional costs and legal challenges may arise, particularly with second-ranking mortgages.
A second-ranking mortgage means that another loan is registered on the same property, which ranks behind the first loan. If the property is foreclosed on, the first-ranking loan will be serviced first. Only then will the claims of the second-ranking mortgage be taken into account. This can increase the risk for the lender and lead to higher interest rates.
Interest rates too high? Judgment of the Hamburg Regional Court – consumer-friendly jurisprudence.
“The effective contractual interest rate exceeds 10.64 percentt the standard market effective interest rate, which was 1.77 percent for housing loans to private households with an initial interest rate fixation of between five and ten years in new business at the time the loan agreement was concluded in May 2018, by more than five times. This also exceeds a higher threshold of 110 percent in low interest rate phases (cf. BGH, judgment of December 11, 19 9 0-XI ZR 69/90–, NJW-RR 199 1, 565). “
Are you paying more than 5% for your real estate loan to your bank? We would be happy to check whether this was correct as part of the free initial consultation.
You don’t have legal protection insurance? No problem!
Many consumers are hesitant to take legal action against loan agreements because they do not have legal expenses insurance. However, this should not be an obstacle. There are ways to cover legal costs through litigation funding.
With litigation funding, an external financier covers the costs of the legal dispute. If the case is successful, the financier receives a share of the amount won. This enables consumers to assert their rights without taking any financial risk.
Summary:
Refinancing or early repayment of a loan can be a sensible measure to reduce financial burdens. It is irrelevant whether a loan is to be paid off early with Consors Finanz or another bank. The legal regulations apply to all banks. However, all relevant aspects, in particular possible early repayment penalties and legal framework conditions, should be carefully examined. If in doubt, consult an experienced lawyer who can help you enforce your rights.
