What are the requirements for the repayment of a loan?

Loan redemption

Loan redemption

The term redemption stands for the transfer of an existing loan from the previous bank to a new bank. The debt as such remains and is only continued by a new lender.

A replacement is usually associated with improved conditions for the borrower. Such a transfer is often carried out after the end of the fixed interest period as part of the necessary follow-up financing.

All requirements relating to ordinary termination are regulated by the legislature in § 489 BGB (Civil Code).

Finally no longer live for rent!

Current mortgage rate

Current mortgage rate

5 years ten years 15 years
-0.22% 0.07% 0.24%

As of March 16, 2020 – Source: Deutsche Bundesbank

Loans are redeemed and transferred from one bank to another, the borrower issues an order to the previous bank, citing the new bank.

A transfer agreement is then made between the two, in which, for. B. the further handling of the collateral provided is also regulated.

The transfer of such loan collateral is carried out by a trust order. This states that the previous lender may only dispose of the agreed transfer fee when all collateral has been transferred to the new lender in a legally effective manner.

Remaining debt

Remaining debt

  • the loan interest (until the date of redemption)
  • prepayment penalty (if applicable)
  • all transaction costs (for the transfer of collateral)

A subtotal results from these amounts. Possible discounts, term-related costs, other interest and possibly amounts for the repurchase of insurance (e.g. residual debt insurance) are then deducted from it. The result is the actual transfer fee.

If you want to change the term of a loan through a debt rescheduling, you usually have to pay a prepayment penalty to your previous bank for such early termination. This enables the bank to compensate for lost interest payments.

  • Without a prepayment penalty, early termination is possible if the borrower has taken out a loan with a variable interest rate. In addition, early termination of the contract with the help of an extraordinary termination can be legal. This is the case if the agreed rate fixation phase is more than 10 years.

Home loan for self-employed: Requirements

The self-employed usually have to meet special requirements when applying for a home loan. For the credit advisor, the income from self-employment must be precisely understandable. The lenders therefore impose strict conditions on loans that are considered collateral for the bank.

To get home loan:

To get home loan:

  • The company must exist for at least three years
  • Profits should be made regularly
  • There should be as little debt as possible
  • If possible, there should be a spouse who takes the loan together with the self-employed

An important note about the profits: Banks consider these before taxes and deduct 30 percent of the total because this value is covered by the self-employed on average for old-age provision.

Architects, doctors and lawyers. They are always classified as creditworthy and get a building loan on favorable terms
It is more difficult for the self-employed with low or fluctuating income. Your mortgage application is often rejected in advance.
This is because the risk for the bank is difficult to calculate. It is particularly hopeless for freelancers who work in dangerous professions, for example in construction.
If you get a building loan, it is normal that you have to pay a risk premium.

Having real estate finance in the program grants such loans. However, the conditions and prices can differ significantly due to the uncertain economic future of the self-employed.

A comparison of the offers is therefore advisable.

A comparison of the offers is therefore advisable.

In a first step, you should use the free tools that you can find online. It only makes sense to contact a financing broker if you have not got any results here and cannot find a bank to give the loan. This causes additional costs.

However, some professions will have great difficulty getting such a loan without expert help.

Traditionally, these are all people who are responsible for catering, operators of fitness and photo studios as well as courier services, as they can also run into economic difficulties at short notice and their services are not essential to life (unlike, for example, with doctors).

 

Loan Without Income Evidence

Do you belong to mothers on maternity or pensioners? What do these two seemingly very different groups have in common? You have a certain income every month.

However, this may not be sufficient if you plan to borrow to the bank. Each of them judges their clients individually, although many of them declare that they do not automatically remove you from the “suitable loan adept” group.

What to do to get approved?

What to do to get approved?

There you have to prove your income and its amount. In addition, if you know that you will not succeed and try to increase it artificially in advance, you will not succeed, the bank verifies this data. In addition, age may also be a limiting factor for the aforementioned pensioners. The problem is also if you have an income but you do not have a fixed-term job. And if you are mainly from abroad, the bank may not recognize it in full and will again provide you with an obstacle to obtaining a loan. Some time ago, there was a novelty in the banking sector – a mortgage without proof of income. This is intended primarily for entrepreneurs who are concerned about the procedure described above and do not want to disclose their income to the bank. However, you will have to accept that only a lower amount can be obtained, in practice this means that the limit is up to 50%. So half has to be paid differently.

Another solution is to try your luck with non-bank providers.

Another solution is to try your luck with non-bank providers.

The so-called micro-loan or payday loan is not usually problematic. Indeed, you should consider whether it is appropriate to borrow higher amounts in circumstances where you do not have a stable job. With many providers, you do not have to prove your income at all, and they are also willing to lend to unemployed people who already have obligations elsewhere, which is definitely not a fair procedure. In many cases this necessity awaits you, but the criteria are not as strict as in the case of banks.

If you are a candidate who can get the loan, you will find out in a few minutes via sms. If you read a positive verdict, the requested amount will be credited almost immediately to your bank account.