Debt restructuring

A loan is usually settled in the form of monthly installments. However, it is often possible to replace a loan early. But what is the exact procedure?

Credit Loss: Shapes

A loan repayment is possible in different variants. This is usually either a special repayment, a debt restructuring, premature loan – peeling or even simply to the regular procedure for the end of the contractual maturity.

Depending on what exactly this is, the process varies.


It is best if the possibility of special repayments was recorded in the contract; otherwise a prepayment penalty must be paid.

A special repayment does not replace the complete loan agreement. This is only a partial amount, the amount of which is recorded in the contract. Usually, in many cases at least one free special repayment per year is possible.

If no special reimbursement has been recorded in the contract, it may still be possible to make such a payment. However, the credit institutions here require a so-called prepayment penalty. The fee is charged because the bank incurs a loss of interest due to the early payment. It should then be recalculated in advance, whether a special repayment is still worthwhile.

debt restructuring

debt restructuring

Here, a new loan on more favorable terms triggers the previous loan.

For a loan that has been paid off for some time, it may pay to reschedule it. This means that the old, existing loan will be replaced by a new loan that offers a lower interest rate.

First of all, the various loan offers of the various banks are compared. Then you select the loan that offers a favorable interest rate as well as other benefits, such as free special repayments and a variable repayment rate. Thereafter, the desired credit can be requested from the bank in question. As soon as the provisional loan commitment has arrived, the actual conclusion of the contract takes place. With a successful lending now only something has to wait until the loan amount has been transferred to your own account. This makes it feasible to replace the old loan. Of course, the regular, monthly installment of the new loan must not be forgotten.

own funds

An early loan repayment with own funds is always a good choice.

However, a loan repayment can always be made from their own resources. For example, it may have been inherited, so it is now possible to pay back the loaned amount in a single amount. This eliminates the monthly installment and leaves more money in the account.

In such a case, the best way to talk to the bank and to ask for the currently remaining balance. The credit institution can subsequently determine the exact amount at a specific date. Then it is only necessary to transfer the sum in question.

Planned credit release

This is simply the full repayment of the loan as agreed in the contract, usually in monthly installments. Accordingly, the maturity of the loan has been reached and the last installment has been paid. Further actions are therefore not necessary: ​​there is no need to talk to the bank in this regard. The loan is thus a thing of the past.

Type of loan

Type of loan

Depending on the type of loan, the loan is wound up in a different way.

When repaying a loan, the respective type of loan must always be observed. Usually it is feasible for an installment and a discretionary loan and a mortgage loan to dissolve the contract at an earlier than the agreed time.

Very simple and without having to inform the bank, a classic installment loan is payable. So here we just balanced the amount that is in the set, with the help of corresponding deposits. This means that the respective account is then led in the credit. Who wants to use the Dispo again, of course, can put into action. However, it is also possible to ask the bank to take the overdraft facility granted back so that it is in the future accidentally no longer feasible, slipping into the target.

If, however a classic installment loan, it is advisable to first check with the credit institution concerned at what height the overdue outstanding balance amounts. As soon as the exact amount is known, the said total amount can be transferred to the credit account. The loan is then paid off.

By contrast, it looks a bit different with a mortgage loan. First, it must be clarified whether this is a loan with or without a fixed interest rate.

In the latter case, it is usually readily feasible to replace the loan at a time earlier than the contract. Since there is no interest rate setting, the bank will not incur losses due to lack of interest payments. Thus, no prepayment penalty is usually payable here.

However, if a fixed interest rate was agreed in the contract, the situation is somewhat more difficult. Here, it is usually the case that first of all the bank has to be asked whether it agrees to a premature repayment of the loan. In addition, it must also be clarified whether and, if so, in what amount, a prepayment penalty must be paid for this. If the bank raises such a fee, it must always be included.

If the old loan with a new loan with favorable interest rates replaced, should be calculated in advance sure whether the interest rate advantage, despite payment of a prepayment penalty, pays off. Accordingly, here is an early redemption of the old loan only makes sense if a certain interest income is still present even after deducting the prepayment penalty.


A premature loan repayment is not always possible but in most cases. The process of replacement varies depending on which loan type it is.

It should be noted that early repayment may be subject to prepayment penalties. This is often the case, for example, with a mortgage loan with a fixed interest rate. Here then it is important to calculate well in advance whether the replacement of the old credit is worthwhile in such a case.

Borrowers who are not sure whether a premature loan release is possible, read in this regard best after exactly in their loan agreement. There is usually specified exactly whether this is feasible or not. As an alternative or in addition, it is of course also feasible to inquire directly with the bank. During the interview, if desired, you can also immediately ask for the determination of the exact remaining amount of the debt.