Loan cancellation

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The credit termination ( English credit termination ) is the termination of a loan agreement by the lender or borrower . Like all terminations, it is the unilateral declaration of intent by one of the contracting parties to terminate the contractual relationship.

General

Credit and loan agreements are long- term obligations that are usually subject to a time limit or contain a due date . With these and also with open-ended loan agreements, one of the contracting parties may have an interest in terminating the loan relationship prematurely. These who legislators the design right provided the loan termination.

This loan termination is legally complex and regulated in numerous individual regulations and depends on whether it is a consumer loan contract or not, a variable or fixed loan rate , timely or immediate termination, whether the lender or the borrower terminates and whether any contractual rights of termination are provided.

Legal situation in Germany

The legal situation at the time of termination always applies to the loan termination.

Termination rights of the borrower (consumer)

The following rules apply to consumer loans , i. H. Contracts in which a company (bank) gives a consumer a loan. Notwithstanding these legal regulations, more favorable regulations for the consumer can be contractually agreed.

If the borrower cancels his consumer loan, the termination is deemed not to have taken place if he does not repay the amount owed within two weeks after the termination takes effect.

Overdrafts

Overdrafts (z. B. overdraft facilities ) can be canceled anytime.

Installment loans

If a fixed interest rate has been agreed, the borrower can terminate the installment loan six months after it has been received in full with a notice period of one month ( Section 489 (1) BGB ).

A new EU directive applies to loans taken out after June 11, 2010: In the future, borrowers can withdraw from the loan agreement at any time and without observing a notice period. Banks may, however, demand a prepayment penalty if the borrower withdraws from his contract early. The amount of the compensation has been precisely determined by the legislator: for loans with a remaining term of more than 12 months, it may amount to a maximum of 1.0 percent; For loans with a remaining term of less than 12 months, no more than 0.5 percent of the remaining balance is possible.

Loans without a fixed interest rate (e.g. variable building loan )

The borrower can terminate a loan agreement with a variable interest rate at any time with a notice period of three months ( Section 489 (2) BGB).

Loans with fixed interest rates (e.g. building loan)

The borrower can terminate a fixed-rate loan agreement in the following situations ( Section 489 BGB):

  • If the fixed interest rate ends, subject to a notice period of one month at the earliest for the end of the day on which the fixed interest rate ends.
  • After ten years have elapsed since full payment with a notice period of six months.
  • In the case of a prolongation agreement, the time of this agreement takes the place of the payment date for the calculation of the new ten-year period.

In addition to these statutory termination options, which do not incur any prepayment penalty , the Federal Court of Justice (BGH) has adopted a right of termination in the following cases:

  • When selling the property
  • If the bank refuses to extend the loan and thus prevents the property from being used economically

In these cases, however, the lender can demand an appropriate prepayment penalty.

Contractual termination rules (e.g. building society loan )

If a termination rule that is more favorable for the consumer has been met, this applies. Examples are:

  • Building society loans can be repaid in full or in part at any time. If the effective interest rate is incorrectly stated, it is possible to exit the contract early.
  • In the case of repayment through life insurance , in the event of the death of the insured person, a repayment will be made without a prepayment penalty.

If none of the above-mentioned cases exist, the only option is to terminate the contract in agreement with the lender against payment of a prepayment penalty.

Lender's termination rights (for consumer loans)

Termination of an installment loan (legally: installment loan)

Due to default in payment by the borrower, the bank can only terminate a non-real estate consumer loan agreement if

  • the borrower is in default with at least two successive partial payments in whole or in part and at least 10%, with a term of the consumer loan contract over three years with 5% of the nominal amount of the loan or of the partial payment price and
  • the bank has unsuccessfully set the borrower a two-week deadline for payment of the outstanding amount with a declaration that if he does not pay within the deadline he will demand the entire remaining debt.

The legal basis is § 498 BGB.

Termination of a real estate loan

The Risk Reduction Act introduced on January 1, 2008, a massive restriction of termination rights for real estate financing model: Cancellation is to paragraph 2. html § 498, paragraph 2 , Section 3 BGB only possible if the borrower with at least two consecutive installments in whole or in part with. at least 2.5% of the nominal amount of the loan is in arrears.

Before that there was no legal regulation on minimum arrears, only the case law of the Federal Court of Justice .

With an original loan amount of 100,000 euros, this is 2,500 euros. In the case of a typical home loan with 5% interest and 1% repayment, this rule means that a borrower cannot make any payment for five months without the bank being able to terminate the loan.

Lender's termination rights (for all loans)

Termination subject to a notice period

These are terminations that take place without any misconduct on the part of the customer. These terminations are not entered in the Schufa.

If a notice period has been contractually agreed, the bank can terminate within this period.

The bank can terminate loan agreements for which neither a term nor a different termination regulation has been agreed (e.g. overdraft facility ) at any time subject to a reasonable period of notice. When determining the notice period, the bank must take the customer's legitimate interests into account.

This means that the bank must give the customer the opportunity to switch to another credit institution. A period of six weeks is appropriate here.

The bank's general terms and conditions form the legal basis for this termination .

Termination without observing a period of notice (extraordinary termination)

These are terminations due to misconduct by the borrower. These dismissals are usually (in fact - but not always right away - even if agreed otherwise with SCHUFA, otherwise the notifiable lender makes a credit repayment .. By another bank / lender largely impossible, that is, he harms himself) in the SCHUFA entered. Contrary to popular belief, the signing of a SCHUFA clause is not important here; As a borrower, by signing the SCHUFA clause, you only ever consent to the transmission of data about the application, the admission (borrower, co-debtor, loan amount, term, start of the installment) and processing as agreed (e.g. early repayment, term extension). Reports due to non-contractual processing (e.g. termination of the loan, utilization of a contractually agreed wage and salary assignment , requested warning / enforcement notice , lawsuit and enforcement measures) are subject to the Federal Data Protection Act and may (only) be made if they are to safeguard the legitimate interests of Bank / lender, a contractual partner of SCHUFA or the general public.

Termination of the loan agreement without notice is permitted if there is an important reason which makes the continuation of the loan relationship unreasonable for the bank, also taking into account the legitimate interests of the customer.

Important reasons are e.g. B.

  • if the customer provided incorrect information about his financial position in the loan application ,
  • if there is a significant deterioration in the customer's financial situation,
  • if there is a significant deterioration in the recoverability of loan collateral , or
  • if the customer fails to meet an obligation to order or increase loan collateral despite being requested to do so.

Furthermore, the breach of a contractual obligation is an important reason, e.g. B.

  • if the customer does not pay the debt service , only partially or late, or
  • the customer does not adhere to individual provisions of the credit agreement (e.g. violation of the agreed specific purpose or the negative declaration ).

In these cases, termination is only permitted after an unsuccessful period of time for remedial action or after an unsuccessful warning, unless this is dispensable due to the particularities of the individual case ( Section 323 Paragraphs 2 and 3 BGB).

The legal basis for this termination, in the event of termination by banks or savings banks, are their general terms and conditions banks (usually Section 19 Paragraph 3 General Terms and Conditions) i. V. m. § 314 , § 490 BGB.

In cases of extraordinary termination, the lender can demand early repayment penalties in accordance with Section 490 (2) sentence 3 BGB.

International

In international loan agreements (particularly syndicated loans ), the Anglo-Saxon common law has prevailed in terms of termination regulations . The standard contracts of the Loan Market Association provide for two termination rules in particular, namely the default clause and the cross default clause .

  • If there are no reasons for default from the loan terms or the loan agreement, the loan or loan can be terminated even if the debtor has breached other contractual relationships. This is made possible by the cross-default clause . It regulates that a breach of contract occurs even if the obligations from the own loan agreement are not violated, but the borrower is in breach of contract in relation to third party creditors. The clause aims to save time in asserting one's own rights. The agreement of a cross-default clause enables other clauses (such as financial covenants ) or individual reasons for default in the context of the default clause to be omitted, because a call may be made if other creditors had to terminate due to their own comprehensive clauses or reasons for default. It is therefore sufficient for the obligee to concentrate on the cross-default clause and leave the specification of the default clause to other creditors in their contracts.

Consequences of termination

After the termination, the borrower is obliged to repay the remaining debt immediately. He can do this from his own funds or by replacing the loan with another bank. Any loan collateral must be returned to the borrower when it comes to repayment / redemption.

As a rule, immediate repayment is not possible upon termination by the bank. It then comes to credit management or loan restructuring .

Individual evidence

  1. ↑ MüKo BGB, 7th edition 2016, BGB § 489 Rn. 13; LG Bochum, judgment of September 14, 2015, Az. I-1 O 68/15
  2. ↑ BGH, judgment of July 1, 1997, Az .: XI ZR 267/96
  3. ↑ Loan cancellation. Retrieved October 18, 2019 .
  4. ↑ Statement by the Bundesbank  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / www.bundestag.de  
  5. ↑ Tobias Nikoleyczik, bankruptcy protection between law and contract. Alternatives to the system of a fixed nominal capital. Eul, Lohmar et al. 2007, ISBN 978-3-89936-605-1 , p. 270 ( tax, economy and law 281), (also: Universität Hamburg, diss., 2007)