As a rule, a car loan is repaid to the bank with the help of consistently high installments. A car loan with special repayment is therefore not available from home.
Only with so-called balloon financing can there be a down payment and a high final closing rate. Despite all this, many lenders are showing their approval and are making special repayments.
Car loan with special repayment – not with every kind of credit
Unscheduled special repayments are a nice thing. They ensure that the term of the loan can be shortened.
Special repayments are very popular, especially with larger loan amounts and long maturities. However, they must be agreed in the loan agreement so that they can be carried out at no additional cost and in the desired manner.
In the case of a vehicle loan, however, unscheduled special repayments are not self-evident. The car dealerships, in particular, have compact financing models that leave little room for a car loan with special repayment.
Therefore, it is almost impossible to use such a loan as a car loan with special repayment. It looks a bit different with loan offers that are used independently of the dealership.
If you take out your loan directly from a bank, you can also arrange a car loan with special repayment. Because simple installment loans can be quite individual in terms of repayment.
The rules for a car loan with special repayment
However, everyone should be aware that a car loan with special repayment requires some rules. As a borrower you can not easily decide that a special repayment is made.
It must be agreed in the loan agreement, so that no penalty interest. A regulation states that consumer credit can be repaid at any time in full or even partially before the end of the period.
However, unless otherwise agreed, the Bank may require a prepayment penalty. After all, escapes by the early repayment interest.
If the remaining term of the loan is less than a year, that would be 0.5% of the loan amount. If the remaining term is greater, up to 1.0 percent of the loan amount may be required as prepayment penalty.
Therefore, it is important that such agreements are made in the contract to avoid unnecessary costs.
When is a car loan with special repayment worthwhile?
A car loan with a special repayment is always worthwhile if during the repayment with a larger sum of money is expected, which is at leisure. Maybe a home savings contract will be due, a return will be paid or other previously committed funds will be released.
Then they could flow into the loan and ensure that it can not only be repaid faster. The special repayment also reduces the costs associated with the loan.
For example, interest accrues every month. If you repay the loan through the special repayment over a shorter period of time, you can save one or the other USD in this way.
Rescheduling also special repayment?
Maybe the right choice was not made when choosing a car loan. It had to go fast and afterwards it could be stated that there had actually been much better offers.
In such a case, a rescheduling is a good way to compensate for the mistakes previously made. But is a rescheduling suitable for a car loan with special repayment?
In principle, yes. A special repayment does not determine how much the loan amount will be redeemed.
The eradication can be partial, but also complete. Thus, a rescheduling can certainly also be regarded as a special repayment and improve the conditions for the car loan.
Our tip: No matter if special repayment or debt restructuring – before such a step, all options must be checked. The first step is cost optimization.
In the second step, but also whether the borrower benefits from the measure. Perhaps it would also be better to reduce the maturity of a special repayment, but the credit rate.