June 27, 2019 Terry Glover 0Comment

Term loans: Any fixed rate loan expires at some point – we advise you early so you know what to do next. Forward loan Ranulae Today you conclude a follow-up contract for your mortgage lending, but only claim the loan at a later date. Irrespective of the interest rate development of borrowing costs. The advantageous borrowing costs can be guaranteed up to five years in advance.

When do I need a forward loan?

When do I need a forward loan?

A term loan is required when the fixed interest period of your mortgage loan comes to an end, but you have not yet fully repaid your loan. However, you can ensure the advantageous interest rates for borrowings up to five years in advance. What is the amount of the forward loan? What are the follow-up financing costs?

In general, the house bank calculates a condition surcharge to secure the preferential debit interest for you. If you wish the agreed later issue of the forward loan, BuyNer also calculates interest on the granting of the loan. If you no longer need the loan or terminate the lease prematurely, the house bank is entitled to an early repayment flat rate.

If you close the forward loan with another financial institution, you have to calculate with additional costs for the reallocation of the basic fee. By assigning the real estate liens, you can reduce the fees incurred.

With Subaulin – Your feel-good climate

With Subaulin - Your feel-good climate

Such a forward agreement gives you planning certainty, because even a small increase in interest rates can lead to a considerable additional burden. For the Savings Banks Forward Loan business, the interest rates for the future successor financing are already fixed. Please note: It can not be predicted with certainty, whether the inclusion of a term credit pays off at the savings bank. It depends more on how the key interest rates develop in the future.

If you conclude a Sparkassen term loan with us, the loan must also be accepted on the specified date (usually after the end of the original fixed interest contract).

Term credit recommended?

Term credit recommended?

With a term loan, borrowers have the opportunity to secure a favorable return for future development at an early stage. The usefulness of using this variant depends on a number of influencing factors. Anyone who needs follow-up financing for a loan in a reasonable amount of time should look around for interesting reasons about three years before the end of the term.

If interest rates appear low and you are charged with rising interest rates, you can take out a forward loan. If you do not use the loan for any reason, you must pay the house bank a large non-acceptance fee.

The earlier you apply for the forward loan, the higher the interest charge. When will a forward loan be recommended? In addition to the private life situation, the forecast of the yield curve is the second imponderable factor before the conclusion of a forward loan. The interest premium that you have to pay in relation to the relevant interest rate can be considered as a form of insurance.

The earlier you receive the forward loan, the greater the uncertainty. On the other hand, you no longer have to worry about being overburdened by the monthly fees of the loan after the fixed interest period expires.