When is debt restructuring worthwhile?

by Edward Debose

Experts repeatedly advise that high overdraft rates should not simply be tacitly accepted. It is, therefore, an excellent solution to convert the overdraft facility into an installment loan and thus save high costs. In principle, this is also easily possible and offers valuable advantages for the consumer.

By repaying, the borrower now receives constant installments, cheaper interest rates and thus the chance of prompt debt relief is significantly higher. In addition, only a few points need to be taken into account when arranging debt overdrafts, and repayment is no problem for many banks even in a short time. It is rarely made so easy for the consumer.

When is debt restructuring worthwhile?

When is debt restructuring worthwhile?

Debt rescheduling is always worthwhile if it appears that it is no longer possible to get out of the overdraft facility without further ado and the situation could probably even get worse. Another reason for the redemption could be that the overdraft rates are simply too high. This is often the case since there is no law in Germany that sets the maximum limit for the interest to be charged.

You can also make a very simple list yourself or use one of the many comparison computers on the Internet to determine the cheaper option by comparing them. In addition, you should always keep in mind that an overdraft facility has a double-digit interest. Unfortunately, 15 percent of pa is a reality these days. An installment loan, on the other hand, is significantly cheaper. The interest rates are well below 10 percent.

Debt restructuring is not worth it – alternative free current account

Debt restructuring is not worth it - alternative free current account

In rare cases, rescheduling may not be worthwhile. In this case, it is important that you still try to keep the costs as low as possible. A good way to do this is to look for a free checking account with, particularly cheap overdraft facilities. Of course, this measure should be carried out in advance, before the overdraft facility was exhausted.

The Internet also offers a wide range of comparison calculators and advice options for finding a great provider and not tapping from one cost trap to the next.

How does it work?

Debt rescheduling is really easy and a good way to get your bank account back on track. The best thing to do is to find a loan provider of your choice on the Internet and apply for an installment loan. You should make sure that the loan amount is chosen slightly higher than the target amount on the checking account. After all, you don’t want to slip back into the dispo immediately.

After submitting relevant evidence and providing information to Schufa, the bank will usually pay the loan in cash or transfer it to the overdrawn account. This account is now cleared and the overdraft facility is replaced. One should nevertheless keep in mind that interest payments will also be incurred for an installment loan, which must also be paid monthly.

In addition, of course, the agreed repayment amount must be paid. That is why it is important not to leave the selection of the provider to change and to carry out a corresponding comparison. Our team will be happy to advise you and help you to redeem your overdraft facility.

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