Loan repayment makes sense if debt restructuring makes sense, how it works and what you need to watch out for. The benefits of this combination should be examined on a case by case basis. If I have a loan, of course, I try to pay the private one first. Pay off loans and save anyway. However, it makes sense to have parallel provisions for next year’s debt repayment.
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However, I still have a basic question: should one choose the repayment as high or as low as possible? Repayment is not possible. With a high repayment, the debt naturally decreases faster, which means that you will have to pay significantly less interest over the years. However, I have heard the following considerations from other real estate experts who have opted for the lowest possible repayment: On the one hand, with a low repayment, you can claim the inflation more for yourself (this aspect is logical for me).
The return on equity increases with a small redemption. I cannot understand this claim, because in my opinion the repayment amount has no influence on the return on equity, but only ensures how much of the cash flow can be disbursed …….
BILLING DAY: Huge gaps in supply threatened by suspension models/repayment loan.
With the installment loan, the repayment amount remains the same and the interest charge decreases over time (due to the falling residual debt) so that the borrower’s regular interest charge decreases over time. The reduction in the interest charge overtime is used here to increase the repayment amounts so that the regular interest charge on the borrower remains constant over time.
However, ingenious minds added a variant to the two above-mentioned forms of repayment ten years ago: the exchange of regular debt repayment by regular savings in an investment product (e.g. building society contract, life or pension insurance, capital policy, etc.). From a purely business perspective, these “combination packages” make sense if the consumer in the savings process in the repayment vehicle receives a higher rate of return than he pays as a loan interest rate.
The debtor’s payments to the repayment vehicle
Are worth more than the interest saved on repayment. The savings product, including the tax burden, is of advantage if the after-tax return on the savings product is above the percentage of the after-tax expenses of the unpaid bond.
At the same time, the expiry payments from endowment life and pension insurance policies were no longer subject to tax until December 31, 2004, and have since been tax-privileged (at least half of them are subject to the personal tax rate).
Therefore, the models of the repayment vehicles were also referred to as “interest rate inflation models”. Instead of repaying the loan to zero with a certain pension, the borrower only pays the interest and, with the repayment saved, creates a higher final balance in the savings product (repayment rate). At the time, these combination products had boosted the buyer’s expectations of an economic benefit (surplus) compared to continuous repayment.
However, the desired advantages of the repayment model are also offset by a number of individual risks, such as the inflation of the business partner’s balance sheet, the higher credit rating, the risk of poor earnings or insolvency, such as the default of the repayment means.
The repayment amount of the loan does not contain any uncertainties, but it is certain – in many cases, the savings product (especially if it is saved in a sophisticated life or pension insurance/capital insurance) offers significantly less maturity than in the case of expectations and was promised as in the past (of course not binding!) forecasts of the suppliers.
The unfortunate situation at the moment is as follows
Private sources of finance can often cost tens of thousands of dollars, and financing medical practices and law firms can cost tens of thousands of dollars. It should be emphasized that the brokers of the above-mentioned repayment models do not inform their customers regularly and early about the impending supply gaps, but rather let them “hit the wall”! have the opportunity to convince themselves of the brokers.
Because presumably one is pleased about further portfolio maintenance commissions and other income from the customer relationship every year and wants to address the customer as late as possible in order to conclude a very negative additional business for the customer (!). Note: omit the non-guaranteed surplus for your own protection. d) Termination of the savings product and negotiation with the house bank about the (early) repayment of the loan.
Because the correct assessment of the individual circumstances brings with it both legal and complicated financial mathematical problems, it may make sense to call in an expert for actuarial questions for a fee.