A loan can be replaced, here is then spoken of a replacement. This usually takes place when a loan is deleted through a rescheduling , but a new loan is taken. If a loan is repaid, this can be done at one and the same bank, but not infrequently, two different banks are included here. The reason for a replacement may, among other things, be the end of an agreed fixed interest period. In general, the interest rate increases after this tie, which many would like to avoid by replacing it with a new loan where the interest rate is lower. Another reason can be the merger of several loans. These can be, for example, the credit line and the personal loan. The credit line is then repaid and the amount plus interest is added to the personal loan. Since many banks offering a replacement, offer more favorable conditions than the previous bank, the change takes place.
But with the replacement, not only the loan or loan agreement has to be transferred to the new bank, but also the collateral. In the case of registered land charges, the replacement and the related transfer must be notarised. The process of a replacement is usually taken over by the acquiring bank, if the customer has given a corresponding power of attorney, because the institution must get all the necessary information, such as the amount of the transfer fee and the collateral.
It is advisable to look at the terms of other banks during the term of a loan, which also offer a replacement, because you can gain the advantage of having to pay a lower final amount, which can also reduce the monthly burden. At the same time, it may also be the case that after a rescheduling with replacement, the amount remains the same, but money is available in addition. Above all, the replacement of a dispo credit is usually useful, because here, the interest rates are higher than a personal loan. However, a replacement must be checked carefully, because not infrequently this is associated with additional fees. The process is not easy for all redemptions if, for example, an interest rate has been set for the entire term with the bank, because then legitimate reasons for redemption must be provided.