Special repayment option for credit: advantages and disadvantages at a glance

In principle, loans are repaid via fixed monthly installments. Outside of this agreed repayment, however, there is often the possibility of a special repayment in order to also trigger the loan completely outside the fixed monthly installments. At Good lender loan we usually agree a free special repayment option with our partner banks for you. You can definitely benefit by saving money and getting out of debt faster !

Definition: What does special repayment mean?

Definition: What does special repayment mean?

If you have additional capital at your disposal, you can use it to repay a current loan thanks to the special repayment right. The special repayment is therefore ideally suited in order to be debt-free more quickly and to save money.

If no special repayment is stipulated in the loan agreement, unscheduled repayments are unfortunately only permitted in exceptional cases and additional fees in the form of prepayment penalty are due. The bank demands prepayment penalty because it loses interest income if you repay the loan or part of it early.

The free special repayment, on the other hand, enables unscheduled repayment without fees at any time. Depending on the contract, however, the special repayments can be capped at a certain percentage of the loan amount per year – for example between five and ten percent. Therefore, when applying for a loan, make sure that the free special repayment is possible and up to what amount you can repay annually.

Advantages of the special repayment option for loans

Advantages of the special repayment option for loans

If you have a special repayment option in your loan agreement, you can save money . Due to the unscheduled repayment, you repay the loan faster and lower the entire interest charge . In addition, the monthly payments are eliminated in one fell swoop , which means that you have more money at your disposal all year round.

Thanks to the special repayment, you can use unforeseen income for the repayment without paying additional fees . Expected but not yet fixed income can also be used for a special repayment. If you are looking to sell a property or expect bonus payments or a raise, you should consider a loan with a special repayment option. However, you have to pay attention to a few points!

You should pay attention to this during the special repayment

You should pay attention to this during the special repayment

Special repayment is included as standard in many loan agreements. However, this varies from bank to bank. If the lender does not grant a free special repayment, you have to pay fees for early repayment of the loan – the so-called prepayment penalty . The banks charge this fee because you are missing income from the loan agreement with which you previously calculated.

The prepayment penalty for installment loans is usually one percent of the remaining debt . If the term is less than six months, the prepayment penalty is 0.5 percent of the remaining debt. Therefore, pay attention to the free special repayment right when you conclude the contract. It is generally not necessary to agree on a free special repayment later. Use the credit inquiry on Credit bureau right from the start. We also take care of a free special repayment on your loan.

Make sure that the free special repayment is included in the loan agreement. You should also take into account the amount at which the special repayment may take place annually. The amount is usually determined in proportion to the loan amount. However, it is also quite common to define absolute total amounts that you can repay annually.

Do lenders have to offer a special repayment option?

Do lenders have to offer a special repayment option?

The offer of a special repayment is not legally required for the lender. A bank is therefore not obliged to offer a special repayment option. This is just an additional service that is often given to you as a borrower.

First alternative to special repayment: statutory right of termination!

In special conditions, however, the statutory right of termination can be applied to repay the loan early and without prepayment penalty. However, this affects loans with a variable interest rate and long-term loans such as construction loans that run for more than ten years. With variable loans, you have the right to cancel the contract at any time with three months’ notice. 

Second alternative to special repayment: Loan contract terminate after a long term

If you have agreed to a fixed interest rate of more than ten years , on the other hand, after ten years you have the option to terminate the loan agreement with a six-month notice period . This is specified in Section 489 (1) No. 2 BGB. In other cases, you have to pay a prepayment penalty if there is no corresponding special repayment right in the loan agreement.

Keep flexibility and use special repayment on loans from Credit bureau!

Keep flexibility and use special repayment on loans from!

In exceptional cases, early repayment of the loan amount is possible after consultation with the lender. However, a prepayment penalty is then charged, which reduces the savings. It is all the better that Credit bureau generally agrees a special repayment option with its partner banks , which means no additional costs for you. Apply now for a loan with a free special repayment option!

The free special repayment has only advantages for you as a borrower . You can put additional capital that is available to you into the repayment of the loan and thus become debt-free faster. It is important to pay attention to the annual sum up to which special repayments are possible. If you do not use the special repayment, there are no additional costs. You then simply pay back the loan at the fixed monthly installments.

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