Chain loan agreement
Installment loan agreements that are "topped up" before the original loan agreement expires are referred to as chain loan agreements or rescheduling loans . This form of loan agreement is primarily offered by installment banks .
Rescheduling of installment loans
Installment loans are usually agreed with a high repayment, so that terms of a few months to 6 years result. These terms correspond to the useful life of durable consumer goods that are purchased with the loan. Due to the interest to be paid by the borrower, a quick repayment leads to an interest saving compared to slowly repaid loans.
If the customer wants additional installment loans, however, the amount of the old and new loan combined is often no longer acceptable or desirable. In these cases, a single new loan (the rescheduling loan) is taken out. Part of the loan amount will be replaced by the previous loan, the other part is available for additional consumption. In many cases, accrued claims on the overdraft facility are also replaced in this context .
An example: An installment loan customer finances his car with an installment loan of € 20,000 at an interest rate of 8% over 6 years. This results in a rate of approx. € 370. After four years there is still a remaining debt of € 7,800. If the customer takes another loan of z. E.g. € 10,000 (same condition) would have to pay € 370 for the first and € 185 for the second over the next two years. If he cannot or does not want to pay the sum of € 550, he can instead take out a rescheduling loan of € 17,800 and pay it back at the previous rate in 5½ years.
costs
As a rule, a processing fee is not only settled by the bank on the requested loan, but also for the loan that has long been paid and for which a processing fee has already been paid. The processing fee for the old loan does not have to be repaid on a pro-rata basis. This "double" paid processing fee is not shown in the effective interest rate to be specified by the bank.
A similar but amount-related effect exists with residual debt insurance (RSV). If the customer took out an RSV for the first loan, it would make economic sense to leave it in place and only insure the new risk that has arisen.
In practice, however, the old RSV is usually terminated and a new one is concluded for the full new amount. Since the surrender value of the old RSV decreases very quickly after the contract is signed, this is an expensive process for the customer.
According to German law, the costs of the RSV are not in the initial to include the annual percentage rate of interest if the conclusion of the RSV is not required by the bank. Since the inclusion of the RSV leads to a considerable increase in the effective interest rate, the conclusion of this insurance is formally almost never a condition of the bank for the granting of the loan, but the bank often gives the impression as if in the sales pitch.
Chain loan agreements
If a rescheduling takes place several times in a row , one also speaks of chain loan agreements. The effects mentioned accumulate here.
If an effective annual interest rate is calculated retrospectively over the entire history of the loan, the result is an effective annual interest rate (especially including the effect of increasing the RSV) that is significantly higher than the respective specified effective interest rate for the individual loans.
In individual cases, the limit of immorality can be reached. If the limit of immorality is exceeded, then only the net credit has to be paid back to the bank - minus the installments already paid.
