The rescheduling is useful for a credit line, if the bank customer takes this over a longer period of time. The current account of the checking account is intended to bridge a short period until the next salary arrivals. Its use for larger purchases is possible, but not meaningful due to the high debit interest. Moreover, this procedure does not correspond to the actual determination of the disposition credit, which is why the financial institutions reject the criticism of the high interest rates on a regular basis.
If current customers make extensive use of their availability framework over a longer period of time, the house bank should actively offer a rescheduling of the credit line. In reality, interim payments often lead to the shortfall of the negative account balance below the limit of the considerable utilization of the investment. In addition, installment loan offers the house bank while cheaper than the credit line, but often more expensive than the favorable offers of direct banks.
What bank customers pay attention to when rescheduling the credit line
Current customers pay attention when borrowing to reschedule for a credit line primarily on a favorable interest rate. You will find this by a credit comparison, which displays the different effective interest rates and the possible repayment terms of the individual banks. Some financial institutions offer their loans not at fixed interest rates, but at credit-based interest rates, so that each customer only realizes his actual credit costs after a non-binding request. Credit-based loans are beneficial for applicants with above-average creditworthiness, while average credit ratings have the same positive interest rates for each loan customer.
A loan for debt restructuring for the credit line is usually readily available, especially as the financial institutions do not take into account any notional repayment amounts for account settlements in their household bills, since there are no fixed rules for the repayment of the deposit. By contrast, rescheduling with a bank account overdrawed beyond the scope of the disbursement is a particular challenge. Such a provision is considered a characteristic of improper economic activity and regularly leads to a rejection of the loan application. A solution is the application for credit with one of the few financial institutions, which continue to dispense with the submission of bank statement copies. This procedure can be identified by the list of documents to be submitted with the loan request.
While bank customers were able to repay the discretionary credit at will, the installment loan for their settlement involves fixed installments. Their amount depends on the loan amount and the chosen term. The latter must not be too low so that the borrower can actually pay each individual installment from its current income. It is not expedient to pay just a monthly installment for the bank loan serving the account settlement from the still available disposition frame.
It is also useful if the installment loan rescheduling debt is linked to flexible repayment facilities such as an occasional installment break – many loan agreements allow one within a twelve- to twenty-four month period – and the possibility of free special repayments. These allow not only a faster exemption from debt, if the creditor receives unexpected additional revenue, but also the replacement of the loan with a new loan, if interest rates continue to fall.
The forced rescheduling of the credit line after its termination or reduction
While borrowing to reschedule an out-of-pocket loan will be easy if the discretionary framework remains, it will be more difficult to terminate or drastically reduce the credit limit. In this case, a higher debit balance appears on the account statement than agreed with the house bank.
As a rule, credit institutions change the termination or immediate reduction of a claimed discretionary credit into a step-by-step reduction of the disbursement framework if the customer approaches them with the corresponding request. This makes it possible to take out a debt repayment loan thanks to the giro account that is neatly managed according to the bank statements.
Even if affected bank customers have enough time to reconcile the account after the agreement for the step-by-step repatriation of the credit limit, it is advisable to install a installment loan and immediately reschedule the credit line. The arrangement with the bank does not exclude the early account balance, which is associated with significant savings.
Balance the credit line as part of a general rescheduling
When account holders settle their out-of-pocket credit only, they incur ordinary consumer credit without earmarking. For statistical reasons, individual banks ask for their intended purpose without the customer having to prove it.
Exclusive account settlement differs when an account holder offsets the credit line as part of a general rescheduling. In this case, the financial institutions do not pay the loan amount directly to the customer if possible, but transfer it directly to the existing loan accounts. The partial amount determined for the settlement of the disposition credit goes of course on the current account of the loan applicant.
Both the mere settlement of the bank account and the additional rescheduling of existing installment loans, the loan applicant can increase the previous loan amount for the financing of further purchases. This is in any case more useful than paying for it again with the credit line.