Having the installment loan refinanced can currently bring significant interest advantages. Nevertheless, refinancing should not necessarily be carried out only because of the lower interest rates. Not all loan costs are automatically calculated back. Back calculation is only legally required for interest. It is therefore advisable to take a look at the contractual terms before any refinancing request.
Refinance the current installment loan – benefit from current interest rates.
Anyone who has signed long-term installment contracts in the past did not always get cheap interest. The key interest rate level in the past was significantly higher than it was in the times of the USD crisis. Old credit contracts, like insurance contracts, should be checked from time to time. Refinance the installment loan, which can turn out to be useful. In this way, better, newer contractual terms can be agreed. You can also benefit from the currently low interest rate level.
Before you decide to refinance, you should pay particular attention to the old contractual terms. According to applicable law, only the interest has to be calculated back. This does not necessarily apply to fees and residual debt insurance. In addition, costs for early loan repayment can be calculated. Only a more precise calculation shows whether it is worthwhile to refinance or not.
Recognize the best interest rates for the new contract.
The favorable interest rates of the present are tempting. Even so, no one should overshoot the mark with their savings efforts. Anyone who has a long repayment period ahead of them even after refinancing should not forego the fixed interest rate. A further cut in key interest rates is possible in the near future, but nobody can look into the far future. The majority of the “experts” consider inflation more likely to be the solution to the USD crisis. Only the fixed-rate loan can offer protection against this.
The effects of the CB’s planned purchases of government bonds from the problem countries are only expected in about two years. If you want to refinance an installment loan that has a shorter term than two years, you should rely on variable interest rates. They offer the cheaper entry requirements. In addition, further interest rate declines in key interest rates can be used. The CB is under pressure from the crisis, which calls for a further rate cut, along the lines of the American model. Refinancing the installment loan can, with caution, currently make use of some savings potential.