Replace loan: 4 advantages & tips

Repayment, also known as loan redemption, describes the process of paying off an existing loan early. If you have an installment loan, you have the option of paying it off early at any time. By paying off an old and expensive loan, you save money and benefit from other advantages.

When you pay off your old, more expensive loan, you save money and benefit from other advantages. However, some banks require a so-called Prepayment Penaltywhich is capped by law.

You can make a loan discharge by making a credit comparison do. You calculate the remaining debt, compare loan offers, choose the best loan and save money.

The advantages of a loan redemption are:

Reducing interest costs: you can find cheaper loans that are significantly cheaper than your current loan by comparing loans.
Increase flexibility: If your financial situation has changed since you took out the loan, you can gain more flexibility by rescheduling by adjusting the term and rate of the new loan to your needs.
Gaining a better overview: You can combine several small loans into one large loan, giving you a better overview of your finances by paying only one loan installment to one bank.
Improving creditworthiness: An excessive number of current loans is assessed negatively by Schufa. If you pay off several loans and make a new loan out of them, you will improve your credit rating by reducing the number of your creditors and Schufa entries.