It is basically possible to take out a loan for debt settlement, provided the conditions are met. This means that sufficient credit in the form of a good and secure income and a positive or least neutral private credit must be given. In a personal loan or a foreign loan, the private credit, however, plays no role. Here it only matters if your income is high enough to allow for regular repayments. A installment loan is generally for free use. So it is easily possible to use it for debt settlement. For this reason, there is no special loan, which is specially marked as a loan for debt settlement.
Installment loan and credit line
Debts can be very diverse. These can be unpaid bills, a minus on the account or a fully debited credit line. In addition, there is often a desire to replace another loan that has become too expensive. This approach is often useful if the general interest rate has fallen since the last borrowing and a installment loan is now available at significantly better terms than at that time.
A credit line is set up in the current account at the house bank. However, this requires that there are regular payments on the account. The amount of the contingency loan is determined by the bank. Basically, the credit line is an optional provision. You have no legal claim to it. In addition, the Bank has the right to adjust or terminate the credit facility at any time if the necessary conditions no longer exist.
The credit line has the advantage that it can be used at any time and without an extra application. In addition, this can be done in whole or in part. When repaying you do not have to stick to a rigid plan, as is the case with an installment loan. So you have the opportunity to contribute repayments at any time. In addition, the credit line is usually offset by the receipt of the following wage or salary again or at least significantly reduced. However, it must not be concealed that the credit line can become a problem under certain circumstances. This is especially the case if you can not repay the credit line in the short term or in the medium term. At least, it would be wise to think about taking out a debt settlement loan.
The first point of contact for a loan is often the house bank. This can also be useful if a credit line is to be settled or another installment loan is to be replaced by the house bank. Here you will save yourself a number of bureaucratic hurdles, because the bank knows you and knows what your financial circumstances are and how your payment history has changed in the past. From this you can draw certain conclusions about your future behavior. However, you should also consider other loan offers before deciding on a home loan debt settlement loan.
Basically, a debt settlement loan is a new loan. This means that you must file an application and attach certain documents, such as your current income statement. Subsequently, the bank will make a decision on whether to grant your loan application. This approach does not differ, or only slightly, from the approach that is usual for every other loan application.
A debt settlement loan can save you a lot of money. However, this only applies if you opt for a loan that is characterized by favorable interest rates. Even if you want to pay unpaid bills so far, you can take out a loan. This approach makes sense, as unpaid bills are often associated with significant fees, especially if the billing date is already some time ago. There are reminder fees and possibly even enforcement costs if you are unwilling or unable to pay your bills. The fees can be many times higher than the actual invoice amount. For this reason, it is strongly advised to think about a debt settlement loan in good time.
A credit comparison can give you a comprehensive overview of the credit offer of private and institutional providers domestically and abroad. Here should you use the Internet if possible. There are several comparison portals that are constantly updated and available 24 hours a day, 7 days a week.
Before you take out a loan, you should determine your specific financing needs. If debts are to be settled in different places, it is advisable to determine the total amount. It would be ideal if you can then take a loan with this sum. So you are rid of all worries and then only have to pay a monthly loan installment. This will not only pay off your debts, but will give you a much better overview of your finances. Last but not least, this reduces the bureaucracy considerably.
If your debt has already led to negative private credit entries, borrowing in Germany is often no longer possible. An exception is only a personal loan, which can be included in your own circle of friends or is available on a private loan portal.
If you do not have all these options, you can also think about a foreign loan as an alternative. This approach is especially advisable if you have a fixed income and a permanent contract. If your income is above the seizure-free threshold, your chances are good that you can get a loan for debt settlement from abroad. The lenders are foreign banks domiciled in Liechtenstein, Switzerland or Luxembourg, which can issue a installment loan for free use to German citizens, provided all conditions are met.
You can either go looking for a foreign debt relief loan or seek the help of a private credit intermediary. Both variants have advantages and disadvantages. If you are looking for yourself, you should thoroughly inform yourself and compare in detail. Only then should you apply for a loan. This can be done over the internet. You do not have to travel abroad to apply for a loan.
You should choose a private credit intermediary as well as a lender, because not all lenders are reputable and there are a number of black sheep in the industry. Among other things, they are identifiable by the fact that you require certain initial costs or that you cheat the customer expensive insurance or Construction loan contracts, because they are supposedly necessary for credit protection.
A reputable credit intermediary does not charge money in advance. He will explain to you the possibilities of borrowing domestically or abroad, taking into account your personal and financial situation. Afterwards he will discuss the further procedure with you.
You must repay a loan for debt settlement in monthly installments. The term depends on the loan amount and the monthly loan installment. Short maturities usually result in higher monthly loan installments than long maturities. This applies regardless of whether you are taking out a loan for debt settlement or for another purpose.