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Termination of loan »Check legal possibilities!

There are factors that make you want to terminate a long-term real estate loan. Unemployment, divorce or death sometimes leads to financial bottlenecks that make it impossible to repay the loan installments.

To escape a personal bankruptcy, there is sometimes only the possibility of termination of the real estate loan and the sale of the property. Unfortunately, high costs often arise in this way.

A few years are usually not enough

A few years are usually not enough

To achieve a significantly higher purchase price than was paid for the purchase. The costs for brokers, notary, etc. are added to the previous costs. In particular, the early termination of the real estate loan can be expensive.

As a lender, the bank is entitled to compensation because it has to forego interest payments for the next few years. These compensation payments are called prepayment penalties. Currently, interest rates are very low, driving this fee higher.

The crisis affects interest rates

  • A prepayment penalty will be payable in the event of early termination
  • There are only a few possibilities for a special termination
  • The revocation of a loan should be done together with a lawyer
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Rescheduling installment credit – what matters is the timing

bank

  • In the case of a faulty cancellation policy: In recent years there was more often the case that banks have used wrong cancellation policy. If your contract was also flawed, you have the option to withdraw your loan. In this case, the bank may not pay you a prepayment penalty. Of course, you will still have to repay the missing installments (without additional interest). It is important that you consult a lawyer for this withdrawal.
  • After a term of ten years: Even if you have chosen a mortgage loan with a 15- or 20-year fixed interest, you have the legal right to terminate this loan after ten years without having to pay a prepayment penalty. The decisive factor is the date on which you received the loan. In addition, you still have to observe a notice period of half a year. The loan can, therefore, be terminated after two years and six months.

Terminate loan early?

To terminate your loan without additional fees. However, this must either be ten years since the loan has been passed or errors in the cancellation policy of the contract to be found.

To withdraw a loan, you should always seek professional help from a lawyer. It can help to significantly reduce the pending compensation due. Request a Good Credit loan offer now Now to the online loan calculator and find the cheapest loan! X

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PPI Credit and Monthly Insurance

Credit insurance is a product specific to SMEs that offer credit sales. It concerns above all the commercial risk that arises during a sale. In this context, it should not be confused with monthly insurance which can be taken out when a loan is taken by an individual. Our explanations.

 

The risk of delusional

The risk of delusional

Credit insurance as such has no direct link with consumer credit . It mainly concerns the self-employed and SMEs which offer the sale of goods or services on credit , that is to say with the possibility offered for the company’s client to pay after receipt of the service . By offering this possibility of payment after delivery of the service, the company is exposed to the risk of non-payment by customers. We thus speak of the risk of delinquency which includes:

  • The risk of impossibility of payment of the customers: if for example the delivered goods cannot be paid by the customer following an insolvency or a bankruptcy.
  • The risk of customer refusal to pay: in the event, for example, of a dispute over the service provided.

For a company, the realization of this risk leads to a double financial loss: on the one hand the service was not paid, and on the other hand it is necessary to add to this first loss the time and the money necessary for the attempt collection of the unpaid debt.

 

Credit insurance: protection against the risk of delinquency

Credit insurance: protection against the risk of delinquency

Faced with this risk, credit insurance works like a traditional cover: in the event of the risk occurring, the insured company receives compensation from the insurer. This is called credit insurance because it specifically insures against the risks of selling on credit . This type of cover is therefore aimed at SMEs and the self-employed, and has no direct link with consumer credit. For more information, see for example the Business-factoring page dedicated to credit insurance.

 

Monthly insurance, or PPI

Monthly insurance, or PPI

Credit insurance, which concerns businesses, should therefore not be confused with monthly insurance . This coverage, called PPI (for Payment Protection Insurance), is an optional product for people who take out consumer credit and guarantees the repayment of the credit in the event of unemployment, illness or accident. For more information, Multicredit offers a detailed explanation on how this insurance works.