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Rescheduling a loan: paying off expensive installment loans

Anyone with several or high-interest installment loans can save money and regain an overview by rescheduling. In doing so, a new, cheaper loan is taken out with which the old ones are paid off. But there are points you should check carefully.

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Your chances of getting your money back

When rescheduling, a new loan pays off the existing ones. If the new interest rate is lower, the monthly burden or the total costs decrease. Consumer loans can in principle be repaid early.
In case of early repayment, the old lender can demand a limited early repayment charge. Also watch out for co-financed residual debt insurance, which can eat up the savings.

What you should do now

  1. 1

    1. Compare conditions

    Compile the residual debts, interest rates, and terms of the old loans and compare offers.

  2. 2

    2. Check the costs

    Take into account the early repayment charge and residual debt insurance.

  3. 3

    3. Organize the payoff

    Have the new lender pay off the old loans directly.

  4. 4

    4. Consider revocation

    Check whether revoking old loans brings additional advantages.

How to spot the scam

  • The new term is so long that, despite a lower interest rate, the total costs rise.
  • An expensive residual debt insurance is co-financed again.
  • Hidden fees wipe out the savings.

Frequently asked questions

Is rescheduling worthwhile?

It is worthwhile above all when the new interest rate is significantly lower and the term is not unnecessarily extended. Calculate the total costs of both variants and include the early repayment charge and insurances.

May I repay an installment loan early?

Yes. You can in principle repay consumer loans early at any time. For this, the lender can demand an early repayment charge limited by law. This must be taken into account in the economics of the rescheduling.

What about the residual debt insurance?

Often a residual debt insurance was co-financed with the old loan. In case of early repayment, part of the premiums may have to be reimbursed. Make sure not to co-finance an expensive insurance again with the new loan, which eats up the savings.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.