Amortization loan
The repayment extension loan (or disagio loan ) is a loan in banking that is additionally granted to the borrower in the amount of the disagio for loans with a discount .
General
The disagio (or damnum ) is a deduction from the loan amount that is retained by credit institutions when the loan is paid out, provided that a lower nominal interest rate is to be calculated at the request of the borrower . However, if the borrower needs the entire loan amount, he can also be granted a repayment extension loan in the amount of the discount. Such loans are common in real estate finance . The mortgage loans with a discount are granted in the form of annuity loans with mostly very long terms , while the repayment extension loans have a maximum term of 4 years and no discount. For these reasons, the loan interest is higher for amortization loans than for annuity loans. The annuities are initially used as repayment for the extinguishing loan until it is repaid; Only then does the repayment of the annuity loan begin, the repayment is therefore "stretched" by the extension of the term of the mortgage loan.
example
To finance a construction project , an annuity loan of 2,000,000 euros (main loan) is taken out under the following conditions:
Kreditsumme: 2.000.000 €
Nominalzinssatz: 6,5 % p. a.
Tilgung: 1 % p. a.
Disagio: 4 % (entspricht 80.000 €)
Auszahlung: 1.920.000 €
The discount is offset with a repayment extension loan:
Kreditsumme: 80.000 €
Zinssatz: 7,5 % p. a.
Tilgung: Ratenkredit in 4 gleichen Jahresraten
Auszahlung: 80.000 €
According to this, the discount of € 20,000 each will be repaid in full in the first four years (plus 7.5% interest pa) and the main loan of € 2,000,000 will only be started in the fifth year with the first repayment installment of € 20,000 (1% of 2,000,000 euros).
economic aspects
Repayment extension loans can only be given in connection with a discount on a main loan. They are always granted by the credit institution that also provides the main loan. Discounts serve to reduce the nominal interest rate , so that repayment extension loans only occur at high interest rates .