Many have heard of consolidation a property or consolidation a home loan , but few people know what the terms and debt consolidation process mean.
Banks and borrowers begin talking and negotiating terms and conditions as they once did when concluding the loan. Depending on the loan amount and the payment history of the borrower, the lender can pay particular attention to the borrower. In the case of consolidation, the borrower wants to negotiate better contract terms .
The two most common requests for a debt consolidation are the need for a higher loan amount and the desire for lower loan interest rates . The desire for lower interest on loans arises, in particular, when the market interest rates on new lending are significantly lower than the interest or the fixed interest rate of the own loan amount at the time of the conclusion of the contract. Depending on how the lender behaves, the customer can be asked for an interview or immediately receive a cancellation. From the point of view of the previous lender, the change in the contract entails considerable expense . He has to weigh up what loss he will receive compared to the previous loan agreement and the new terms.
The weighing up and the final decision are usually dependent on the overall financial situation of the lender. Both national and international contexts and own liabilities with financial partners must be taken into account here. From this network of contexts, the processing of a change request of the loan agreement can not only take longer, but also be negative for the borrower. The alternative to consolidation the current lender offers the consolidation and, so to speak, the taking of the existing loan to a new lender.
The so-called takeover of the old loan means in practice that you take up a loan amount at the new lender at a significantly improved loan interest rate . With the loan amount, you pay off the old loan and pay any prepayment due on premature termination of the loan.
In many mortgage loan agreements , the cancellation policy is incorrect or incorrect. For you as a consumer, this means that you can avoid the prepayment penalty or reclaim the prepayment penalty you have already paid.