Debt restructuring is intended to achieve the goal of noticeably improving the financial situation when the debt is high to unbearable. This should make the liabilities bearable again and make them affordable overall. Debt restructuring is one way to limit this imbalance of many loans to one loan.
Debt rescheduling with private loans: Combination of several partial debts into one total debt
Experience has shown that the reasons for debt restructuring have accumulated over the course of several years. Both the amount and the number of very different liabilities has increased continuously.
These include the overdraft facility on the checking account, the installment or framework credit at the house bank, the card credit, the installment payment agreed with the mail order company and other requested loans, and many smaller liabilities. In many cases, the sum of these amounts to a five-digit euro amount.
The installments are due on different dates and are spread over the entire month. The person concerned must literally manage their debts over several months or years. In each individual case, he must ensure that the account is adequately covered when a loan is due to be debited.
This is made more difficult by the fact that interest rates tend to be higher rather than lower. Any extraordinary payment becomes a problem that will carry over into the next month. An improvement in the situation cannot be foreseen without a major change.
Debt restructuring is the only option. Debt means taking out a single large loan instead of many smaller ones. This loan is used to replace all existing liabilities. Debt restructuring often also improves the credit rating. Ultimately, this also enables better conditions for future loans.
Option 1: Find, find and reschedule a new house bank
If the debtor has decided to reschedule the debt, he must find a credit institution to support him. That can, but need not be, the current house bank. Experience has shown that it is more promising to approach debt restructuring together with another bank or savings bank. The bank sees it as a business advantage to gain a new customer.
This opens a checking account and takes out a high, but financially justifiable loan, on which the credit institution earns with the interest. In comparison, debt restructuring is always associated with significant cost savings. A high loan on installments is ultimately cheaper with its effective interest rate than, for example, the overdraft facility or the card facility.
As a result of the debt rescheduling, the debtor pays the bottom line less than before and in future only once a month. The lender debits the credit installments from the checking account, the borrower does not need to be active himself. The debit date is set so that the required account coverage is secured.
The debt is processed by the bank
The debtor has nothing to do with the settlement itself. His new house bank receives all necessary documents and information about the existing liabilities from him. After opening the new current account and signing the loan agreement, everything else is done by booking.
The borrower transfers the respective partial amounts to the creditors, so that the liabilities there are released. If exactly the calculation has been made, then the debt payment on the one hand and the loan amount on the other hand are identical. Any remaining amount will be credited to the checking account.
Due to the size of the new loan, the borrower has to be satisfied with a very low overdraft facility, possibly without it for a certain period of time. A few weeks later, he receives written confirmation from all creditors that the liabilities have been settled.
Option 2: debt restructuring at Best bank
Crowdlending platforms like Best bank have become a promising alternative when it comes to debt restructuring. Especially with non-optimal Credit bureau values, quite a few borrowers use the opportunity to pool their liabilities via Best bank. Apply for your personal loan without obligation and free of charge!
Monitor the settlement of liabilities in the Credit bureau database
In its own interest, the borrower must ensure that the debtors are informed of the creditors of Credit bureau. In the following weeks, he must therefore regularly check his Credit bureau. If nothing or very little changes there, he should contact Credit bureau on his own initiative and point out the new situation.
This also has a positive impact on the Credit bureau score. The score is significantly better with a single loan than with a large number of smaller liabilities with different creditors.
The order of a successful debt restructuring can be summarized as follows:
• Own decision to change debt
• Finding / finding a credit institution that is ready for it
• Opening a new current account
• Taking out a loan in the amount of the total debt
• Exemption from existing liabilities by the lender
• Monitoring of an update of the Credit bureau database, that is, the own Credit bureau
Debt credit: Advantages of debt restructuring with Best bank
In summary, it is reasonable to reschedule several loans with smaller sums into a single loan. This not only reduces the risk of default, but also provides a clear option to pay off the loan. At Best bank you only have the chance to pay one payment date with an interest rate that is individually adjusted for you.
Not only the costs, but also the term and amount of the loan are adjusted to the borrower. It is also possible to improve your credit rating because you have less outstanding debts.