Borrowers who can demonstrate a good credit rating often have the option of agreeing a special repayment on their loan. A special repayment enables the borrower to increase the loan installments at any time or to repay the loan early. This has many advantages, because the loan with special repayment is very flexible. This loan is particularly worthwhile for those who earn different amounts of money, such as self-employed people. The interest saved will be paid out at the end of the term.
How high can the special repayment be?
Special repayments, which not every borrower can avail, can be of different levels. A level that is customary in the trade is ten percent of the loan amount. This gives the borrower the opportunity to claim this amount every year. If you want to achieve more, you have to talk to the bank. Just as the loan amount is a matter of negotiation, so is the loan with a special repayment.
Repayment schedule – useful for the borrower
Anyone thinking about a special repayment before concluding the contract should draw up a repayment plan. This overview enables the borrower to present the plan to the bank in order to be able to negotiate. If the loan with special repayment is home finance, then a percentage of five percent can be achieved. It always depends on the loan amount how high the repayment can be.
If it is only a small loan that has an amount of 5,000 USD, it is hardly worth it. But if it is 50,000 USD, if the term is very long, a special repayment can always be agreed. A long term always means that the debt is long. If there is an opportunity to reduce this time, a special repayment loan should be used.
What needs to be considered?
Banks will not offer special repayment to the borrower. That has to come from the borrower alone. Not all banks agree to this because they lose cash with special repayments. If a bank is not advised to grant such a loan, other banks should be visited. There will always be a bank that will grant the loan. Often, the loan can be repaid in full if it is car financing. If the vehicle was sold, where a loan had previously been taken out, a special repayment can help to eliminate the debt with the proceeds of the sale.