Redeem expensive loan and take out a cheaper one!
Redeeming a loan is worthwhile when you have several loans running in parallel that you will still have to service for a long time. The online loan is often also a loan whose application can be answered quickly with an immediate loan approval. Redeem your loan now and save money!
If you have loans to pay off, you should compare the interest conditions that applied when the loan was taken out with the current interest rates from time to time. Especially when interest rates fall or have already remained at a low level for some time, it may be worthwhile for you to seriously consider the topic of redeeming a loan.
Today you can find online loans with which you can redeem an existing loan. If you can take out a loan at a lower cost compared to your current loan obligations, do not hesitate to have a new lender redeem the loan.
You can obtain an immediate loan approval from MAXDA, a long-established and successful loan specialist that arranges individually tailored loans with several partner banks.
Apply for a new loan & redeem the old loan
After submitting your application, we will inform you within a short time with either an approval or an alternative offer. The actual loan processing takes, with your support, only a few days, so you can expect a quick payout in cash or by bank transfer.
You can therefore quickly use the payout to redeem the loan. A rapid settlement of a credit card and an overdraft facility has a beneficial effect on high monthly expenses.
Redeem a loan? It's that simple online!
Redeeming a loan that was taken out in times of high interest rates and still requires monthly payments for a long time can be worthwhile for several reasons.
If you can consolidate several loans into a single one, this leads to greater clarity and a bundling of costs and fees. Don’t pay different, but always high, interest rates for several loans.
If you can take out a loan at a low rate, redeeming the loan is usually worth it. You only need to carefully review your financial situation and decide how you want to redeem the loan.
Everything is ultimately determined by the interest conditions of the new lender and the associated fees you have to pay for a debt restructuring.
Applying for a cheap online loan with MAXDA is very easy and uncomplicated. After you submit your application, you will receive an immediate loan approval within a short time. You only have to decide for which purpose you want to take out the loan.
You can repay an overdraft facility, take out a regular installment loan, restructure multiple loans or arrange the follow-up financing for a mortgage.
Prepayment penalty when redeeming a loan
A prepayment penalty is due if you have taken out a loan with a fixed interest rate and want to redeem the loan before the fixed-rate period expires. If that fixed-rate period has already expired and a remaining balance exists, the lender can be changed to repay it. If the fixed-rate period lasts more than 10 years, a loan can already be redeemed without a prepayment penalty after 10 years. Borrowers then only need to observe the notice period for terminating the installment loan set by the bank. This period is usually six months. The loan termination can be submitted after the 10 years have elapsed.
This type of refinancing generally concerns mortgage loans.
There is no statutory regulation for the amount of the prepayment penalty that banks may charge. However, they must adhere to certain guidelines set by the Federal Court of Justice (BGH). Whether the amount named by the bank as compensation is reasonable can be reviewed by the consumer advice center.
In the judgment of the BGH in case XI ZR 267/96 the court says about the amount of the compensation:
"A permissible calculation approach is the comparison between the contract interest rate and the yield of term-congruent capital market securities of public debtors."
Roughly calculated, the bank must therefore be paid the interest as compensation that would have accrued until the end of the fixed-rate period. However, the lender must also take into account any special repayments the borrower could have made until the end of the fixed-rate period.
Early termination, i.e. before the end of the fixed-rate period, is regulated in the BGB as follows:
"The borrower may, by observing the periods of § 488 (3) sentence 2, terminate a loan agreement early if the nominal interest rate is fixed and the loan is secured by a land charge or mortgage on property or by a ship mortgage, if his justified interests so require and six months have elapsed since the full receipt of the loan. Such an interest in particular exists if the borrower has a need for an alternative utilization of the item pledged to secure the loan. The borrower must compensate the lender for the damage that results from the early termination (prepayment penalty)." (§ 490 BGB)
An alternative utilization is usually the sale of a property. The loan agreement with the bank must not contradict this.
If you, as a borrower, want to redeem a loan, you should first observe the conditions for the duration of the fixed-rate period and the notice period. If both are observed and it is only a matter of the favorable repayment of the outstanding balance, options for further financing can be compared much more easily. To do this, it is best to obtain an offer from your current lender and compare it with offers from other providers.
Also note that collateral such as a registered land charge or mortgage may have to be transferred to the new lender.