Repaying a loan can take many years and is often not only a financial burden for the debtor. It is all the more interesting that borrowers can significantly shorten the repayment period thanks to unscheduled repayments. But what exactly does unscheduled repayment mean for different types of loans, what are the advantages and disadvantages, and can it really save money in the long term??
What does unscheduled repayment mean?
An unscheduled repayment is an early partial repayment of a loan. However, this repayment is subject to a number of restrictions. First of all, the unscheduled repayment is not always a basic right of the debtor. It depends on the type of loan, whether it can be repaid early and in any amount. Furthermore, the possible amount of an unscheduled repayment is often clearly limited. In the case of construction financing, it is about 5% of the total loan amount that can be repaid in the form of an unscheduled repayment. Online loans are, however, not as high as conventional real estate loans.
The unscheduled repayment of an installment loan
In the case of an installment loan, since 2010 there has been a fundamental and legally secured option to repay it in part or in full at any time after one month of the loan term. However, the lender is free to demand a so-called early repayment penalty to compensate for the lost interest income (§ 489 BGB). This amounts to up to one percent of the net loan amount. Only for terms of less than one year, a maximum of 0.5 percent of the loan amount may be claimed in the form of an early repayment penalty.
Unscheduled repayment of a construction loan
The situation is different when it comes to construction financing. Here, an unscheduled repayment must be agreed at the beginning of the loan agreement. This also determines whether or not. from which amount of the unscheduled repayment an early repayment penalty is due. In the case of construction financing, it is customary that around 5% of the net loan amount can be repaid outside the regular installments, without this immediately entailing additional costs. On the one hand, a borrower should therefore endeavor to have this option guaranteed in the contract at the outset. On the other hand, these early repayments are worthwhile, as they reduce the residual debt and increase the repayment portion in the monthly annuity.
Variable or fixed unscheduled repayment: what to look out for here?
There are two types of unscheduled repayments. There is on the one hand the variable special repayment; the so-called optional special repayment right. In this case the debtor is free to decide if and when he wants to make use of the right. Restrictions are only by the mentioned maximum repayment amount, as well as the requirement that an optional unscheduled repayment can only be made once a year, available. Splitting the unscheduled repayment over the year is then excluded.
This contrasts with the fixed unscheduled repayment. It is a defined provision at the beginning of the contract when and in what amount the unscheduled repayment has to be made. Accordingly, it represents a special form of loan repayment that does not provide the borrower with any additional flexibility during the term of the loan. If you have this form of unscheduled repayment, we recommend that you always repay the amount as early as possible. The monthly interest charge always results from the current residual debt amount. The lower the residual debt, the lower the interest rate. Since the interest payment is usually made monthly, the residual debt from the current month is also used for this purpose.
What are the advantages and disadvantages of unscheduled repayment??
The advantages of the unscheduled repayment result from the reduction of interest costs, so that taking out a loan becomes cheaper overall. Even the prepayment penalty does not change this much, as it is usually lower than the interest savings. The gain in planning flexibility for the borrower should also not be underestimated, as the repayment can be adjusted at any time to the borrower's own and possibly changing life situation.
On the downside, the possible additional costs must be mentioned. These can be banks in the form, the just mentioned early repayment penalty, levied. Fixed special payments can also have a negative impact if they cannot be made at the agreed time.
In conclusion, however, it can be stated that there is no real disadvantage for the customer, which is z. B. could have a financial impact. By the special repayment the customer has much more the flexibility with a higher liquidity the remaining debt to reduce. With installment loans can be paid off in such a way a part on a blow. In some cases, banks also offer loans with a free total repayment. D. h. You can pay off the entire loan overnight and do not have to pay any fees for it.
Save money with a special repayment
With an unscheduled repayment, the total cost of a loan can be significantly reduced. The following tips will help to ensure that you actually benefit from all the advantages of the unscheduled repayment and save money with the early repayment, however.
On the one hand, an unscheduled repayment should only be made as soon as you can be largely certain that the sum of money will not be needed elsewhere in the foreseeable future. Otherwise, another loan agreement would be needed for other expenses, which would usually be more expensive than the savings from the special repayment.
In addition, it is useful to calculate different options with different providers to then determine with which credit institution the lowest additional costs in the form of an early repayment penalty incurred. In our online loan comparison, you will also find numerous banks that do not charge any prepayment penalty at all for an unscheduled repayment. Therefore, you should ask yourself as a loan seeker the question, why you still go to a bank at all or. should change, which still charge such fees!
Finally, you should know that according to a ruling by the Darmstadt Regional Court (Aktz. 13 O 285/16) the unscheduled repayments or. the right to this must be taken into account in an early repayment penalty even if the debtor has not made any unscheduled repayments in the past. If it is not regulated in the loan agreement that not exercised unscheduled repayment can not be made up later, these must be taken into account in the calculation of possible early repayment penalties.