debt restructuring despite Schufa

Debt restructuring despite Schufa: This is the best way to proceed!

Credit check:

Despite a negative Schufa rating, debt restructuring is possible , but other factors such as regular income or existing collateral must be used to assess creditworthiness. Lenders must ensure that the debtor is able to repay the refinanced loan.

Search for specialized lenders:

There are credit institutions and private lenders who specialize in borrowers with negative Schufa ratings. They often have experience with these cases and can offer more individual solutions if necessary.

Transparency and openness:

When refinancing despite a Schufa entry , it is particularly important to be open and honest about your own financial situation. If you conceal important aspects, it can damage the lender's trust and reduce the chances of refinancing.

Advice and support:

Since refinancing despite Schufa is often complex , it is often helpful to seek professional support . A debt counselor or an experienced financial advisor can offer valuable help in finding suitable lenders and drawing up a viable repayment plan.

Risks and costs:

It is important to remember that refinancing despite Schufa often involves higher interest rates and costs . Therefore, you should carefully check whether refinancing in this situation actually leads to financial relief and whether the additional costs are bearable.

Business woman with glasses explains the situation

This is what is meant by debt restructuring:

Debt restructuring involves paying off existing loans. It is a process in which one or more existing loans are replaced by a new loan . The new loan is used to pay off the old debts. The debtor then only has to pay back the monthly installments of the new loan.

This can be difficult, as many credit institutions are hesitant to grant a new loan if there are negative Schufa entries . However, there are specialized lenders and certain programs that can help such people to refinance their debts.

A common reason for planning to refinance is that the new loan offers more favorable conditions . For example, lower interest rates or a longer term , which reduces the monthly burden.

Debt consolidation can also be used to simplify finances by combining several loans into one.

Always keep in mind that additional fees will be charged when you change your loan , which of course must be taken into account in the overall assessment.

IMPORTANT: New loans should only be used as a last resort

Here is the explanation in detail: "That's why a new loan is rarely the right solution"

If you have already dealt with the topic of credit, You will regularly receive advertisements and ads on the Internet relating to the topic of "cheap loans".
 Newsletters also give the impression of cheap loans from online providers and comparison portals. It is not easy to resist this temptation, even if there are often better solutions.

You are lured by the idea that you could get a cheap loan to refinance your debts, with low interest rates and small monthly installments. You probably know yourself that money is not lent cheaply and that loans are therefore always a risk

"Cheap" loans for a "quick" debt restructuring? Usually "too good" to be true.

If an offer sounds attractive, you should be cautious.
 Debt consolidation means that you take out a new loan to pay off old debts. Normally, you should pay less interest on the new loan and therefore have lower monthly payments overall.

Especially if you are heavily in debt, you probably already have problems with your creditworthiness and negative entries in your SCHUFA . In this case, it will be difficult to get a loan and, if you do, it will be expensive. Always pay close attention to the effective annual interest rate and don't forget the fees for repaying old loans.

Debt consolidation does not stop your current debt spiral. Quite the opposite. It often means taking on new debt to pay off old debt, and the real problem is only postponed and often made worse.

If you take out a debt consolidation loan from a dubious financial institution, the situation can worsen dramatically . These dubious companies are often based abroad and are difficult to prosecute, especially if they charge usurious interest rates. In addition, such lenders are not exactly known for their flexibility or willingness to compromise.

There are some risks and disadvantages of taking out additional loans for heavily indebted individuals.

The risk of falling into the hands of dubious lenders is high . In addition, the new loan will be recorded in your Schufa, SCHUFA-free loans are expensive and reputable banks will probably turn you down and recommend that you fundamentally improve your financial situation.

If you cannot repay the debt consolidation loan, your debts will only increase. In some cases, your only option is personal bankruptcy.

Bankruptcy is often the right way to get completely out of debt after three years. Please seek advice from us or another reputable agency and check all alternative options in advance.

Debt restructuring is not an easy solution and involves risks.

Another sensible alternative: the out-of-court settlement

As a rule, you should refrain from a conventional debt consolidation because you already have debts and another loan will not provide you with any real relief in the long term.

While it is commendable to want to solve financial problems on your own , there comes a point where you should consider professional debt counseling .

The best, easiest and usually quickest way to a debt-free life is often out-of-court debt settlement . And this challenge is best tackled together with experts . Because they know what they are doing, are much more experienced in negotiating with creditors and will try to achieve the ideal desired result for you.

With an out-of-court debt settlement, you can reach an agreement with your creditors to pay off your debts in a way that is realistic for you, without going to court. This can allow you to obtain lower installments or a partial debt waiver to improve your financial situation.

If a creditor settlement cannot be reached for any reason, the path to private insolvency or corporate insolvency is a last sensible alternative . Although you have to live with restrictions for a certain period of time, you can also look forward to a new financial start!

A financial advisor or debt counseling agency can help you find the best solution for your individual situation.

If a loan is necessary: ​​Can I get a debt consolidation loan with a negative Schufa rating?

A negative Schufa can affect the chances of refinancing , as many traditional banks and lenders are hesitant to grant a loan if you have a negative Schufa entry. The reason for this is that a negative Schufa is often seen as a sign of a higher credit risk.

However, there are lenders who specialize in loans for people with a negative Schufa rating . These lenders take into account other aspects of your financial situation, such as your income and employment situation, and not just your Schufa rating. Therefore, it may be possible to get a debt consolidation loan despite a negative Schufa rating .

However, it is important to note that loans for people with negative credit scores can often have higher interest rates and stricter terms and conditions . In addition, these loans may also include other fees and costs. All aspects of the loan should be carefully examined to ensure that the monthly installments are affordable before taking out such a loan.

If you are considering debt consolidation and have a negative credit rating , it may be helpful to seek advice from a financial advisor or debt counselor. They can help you understand your options and find the best solution for your specific situation.

Debt restructuring offers both advantages and disadvantages

Five advantages of debt restructuring:

  1. Lower interest rates:
    A major benefit of refinancing is that you may be able to get lower interest rates. If interest rates have dropped, or if your credit score has improved since you took out the original loan, a refinancing loan may be available on more favorable terms .
  2. Debt consolidation:
     If you have multiple loans, debt consolidation can consolidate them into a single loan. This makes it easier to manage your debts and you only have to pay one monthly installment instead of having to remember different payment dates and amounts.
  3. Reduction of monthly payments:
    By extending the term of the loan through debt consolidation, monthly payments can be reduced . This can be helpful in times of financial difficulties to reduce the monthly burden.
  4. Better overview of finances:
     Consolidating multiple loans into a single loan gives you a better overview of your total debt . This can make it easier to create a budget plan and manage your finances.
  5. Ability to remove a co-borrower:
    If you originally required a co-borrower for your loan, refinancing offers the opportunity to remove that co-borrower from responsibility , assuming your own credit score has improved.

Five disadvantages of debt restructuring are often:

  1. Possible early repayment penalty:
    If you repay a loan early, you may be subject to a prepayment penalty. This fee is charged by lenders to make up for the interest they lose by paying off the loan early. These costs can be significant and should be taken into account when deciding whether refinancing is beneficial.
  2. Administrative effort and time expenditure:
    Refinancing a loan requires some work and time. It is necessary to compare different loan offers, fill out applications, possibly submit documents and negotiate with banks. This effort can be daunting and should be taken into account when making a decision.
  3. Expiry of the residual debt insurance:
    If you took out residual debt insurance for the original loan, this may expire if you refinance. This insurance is designed to ensure that the loan is repaid in the event of unemployment, illness or death. If it expires, it may be necessary to take out new insurance , which may incur additional costs .
  4. Potential increase in total costs:
    While refinancing often reduces monthly payments, it can increase the overall cost of the loan, especially if the term is extended. Even though monthly payments are lower, a longer repayment period usually means paying more interest over the entire term of the loan .
  5. Risk of over-indebtedness:
    There is a risk that some debtors will see debt consolidation as an opportunity to take on more debt, as the lower monthly payments may make them feel like they can afford more . However, this can lead to over-indebtedness if careful planning and budgeting is not done.

A loan is always an additional financial risk. Especially if you have a negative SCHUFA (which is likely if you are in debt), you should consider this carefully. >> Be sure to consult us in advance!

Free download / form link:
>> Request a free SCHUFA report now

Keeping an eye on the costs of debt restructuring

When refinancing, fees may primarily be incurred in the form of a prepayment penalty if the existing loan is repaid early.
In Germany, it is generally possible to terminate and repay any loan before the agreed end of the contract, although lenders can demand compensation in this situation.

If the loan has more than 12 months to run, a fee of up to 1% of the outstanding loan amount can be charged ; if the remaining term is less than one year, the maximum fee is 0.5%. However, interest-based real estate financing with a term of up to 10 years is exempt from the regulation.

Some banks allow borrowers to obtain a fee-free full repayment before the end of the contract , but this only applies to a few banks. Therefore, before applying for a debt consolidation loan, you should always check the contractual conditions of the current loan with regard to any possible early repayment penalty that may be due .

Paragraph §502 of the German Civil Code regulates early repayment penalties for banks . This regulation also states that the amount of the compensation may not exceed the interest that the bank loses due to the early repayment of the loan.

How do I calculate the debt consolidation loan?

Due to the strong inflation, the cost of everyday living has increased noticeably in recent times . People who are currently still paying off debts could save their wallets significantly by refinancing their debts . This is because many borrowers often pay for their loans and installment financing. higher interest rates than necessary

Refinancing only makes sense if the savings from the lower interest rates on the new loan outweigh the costs of the so-called prepayment penalty . This must be paid to the bank in order to be able to get out of the old loan agreement. With the refinancing calculator from Verivox (*we are not a partner) , for example , you as a borrower can quickly and easily find out whether it is worth it for you to refinance your current loan or whether you should continue to pay it off.

Special features of real estate loans and construction financing

House with garden valuable property

An additional cost component , which only occurs with real estate loans and construction financing, are the fees for a notary and any changes in the land register . These fees usually amount to around 0.2% of the outstanding loan amount .

fees for debt restructuring

fee type Amount of fees (% of remaining debt)
prepayment penalty Remaining term > 1 year: 1% of the remaining debt Remaining term ≤ 12 months: 0.5% of the remaining debt
fees for notary and land registry 0.2% of the remaining debt (only for construction financing)
>> Form as PDF / Download link: Request free SCHUFA information now

How is the prepayment decision related to debt restructuring?

The prepayment penalty plays a crucial role in debt restructuring, especially in mortgage lending . It is compensation that the borrower must pay to the bank if he repays a loan before the end of the agreed term or outside the contractually agreed notice period.

Banks and other lenders charge this fee to compensate for the loss of interest they incur due to early repayment of the loan. When you take out a fixed-rate loan , the bank calculates the expected profit from the interest payments over the entire term.
If you repay the loan early , the bank does not receive this profit and therefore charges the early repayment penalty as compensation .

Let’s take a real estate example:

You have taken out a mortgage for a property , agreeing to a fixed-rate loan with a term of 10 years and an interest rate of 3% . However, after 5 years , the interest rates have reduced to 1.5% and you decide to refinance to benefit from the lower interest rates.

However , if you repay the original loan early , the bank will have to forego the future interest profit that it had expected. Therefore, it will charge an early repayment penalty. This fee is usually based on the remaining loan amount and the difference between the original and current interest rate .

Let’s assume that the remaining loan amount is 200,000 euros.

The bank would have charged 3% interest on this sum over the remaining 5 years, which is 30,000 euros. However, since the current interest rate is only 1.5%, if the bank lent the money again now, it would only have received 15,000 euros in interest . The early repayment penalty could therefore only be around 15,000 euros to directly offset the bank's loss at that time.

The exact calculation of the Prepayment compensation is very complex and depends on various factors.

This includes the exact terms of the loan and the lender's specific regulations. It is therefore important to seek professional advice before refinancing.

How high can the debt consolidation loan be?

Tall bank or office building from the outside
  • The amount of a debt consolidation loan often varies from Lender to lender. Generally, lenders need to make sure that you have the ability to repay the loan , and they take a number of things into account:
  • debt level:
    The debt consolidation loan should generally be high enough to cover all existing debts that you wish to refinance.
  • Income and financial situation:
    Lenders look at your income and financial situation to determine how much of a loan you can afford . This includes looking at your fixed monthly expenses like rent, utilities, groceries, etc.
  • Credit-worthiness:
    Your creditworthiness, often measured by your credit score, also plays a role. If you have a good credit score, lenders are more willing to give you a larger loan .
  • Collateral:
     If the loan is secured by collateral, such as real estate, this can affect the amount of the loan. The value of the collateral serves as an upper limit for the loan amount.

It's important that you don't borrow more money than you can afford to pay back . The monthly payments should fit your budget.

How do I find a cheap debt consolidation loan?

The following things can help in advance:

SCHUFA self-check:

Before applying for a debt consolidation loan, it may be worthwhile to request a free copy of your own data that is stored at SCHUFA . If you find incorrect, expired or already paid entries in this overview , you can request deletion and thereby improve your SCHUFA score . And a better score at SCHUFA leads in most cases to cheaper loan offers .

Make the most of opportunities to earn more money & save money:

If your income has increased recently, you can use the higher disposable net income with a debt consolidation loan to get better To obtain interest rates with a higher monthly payment and a shorter term. This can ultimately save you money.

  1. Use comparison portals:
    There are     numerous comparison portals online that compare different loan offers side by side and thus enable a transparent selection. The portals usually show the conditions of various banks and lenders and thus enable a quick overview of current loan offers and their interest rates.
  2. Direct inquiry to several banks:
    It can be worthwhile to ask various banks or credit institutions directly about debt consolidation loans. They can often create individual offers that are tailored specifically to your personal financial situation. There is also the option of negotiating the terms and conditions and thus achieving more favorable conditions.
  3. Consult a financial advisor or broker:
    A financial advisor or broker can help you find a suitable offer. They usually have extensive knowledge and contacts in the financial sector and can therefore find individually suitable loan offers. However , it is important that the advisor or broker works independently and is not tied to a specific bank in order to receive an objective offer.

Which banks offer debt consolidation loans?

We cannot provide you with a direct list as this changes depending on current offers. * However, you will find a current comparison option on the following page .

*Disclaimer:
We have no partnership with the landing page and ask that you research the results on your own responsibility before making any financial or other decisions.

Can you refinance your debts despite ongoing wage garnishment?

Debt restructuring is generally possible, even if wages are being garnished. However, wage garnishment can usually lead to a negative SCHUFA entry, which could significantly reduce the chances of getting a new loan from the bank.

What are the alternatives to debt restructuring in the event of wage garnishment?

There are loans that are granted independently of SCHUFA.

However, these often come from less trustworthy providers or are so costly for borrowers that refinancing could result in further debt . Instead of taking this route, it is advisable to contact a debt counseling agency or a state-recognized, certified and qualified insolvency advisor .

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