Special repayment: Pay off the loan quickly
A special repayment is an unscheduled payment. In this case, unscheduled means that in addition to your monthly installment, you add an additional amount to your loan. This means that the remaining debt is reduced faster and you are free of debt earlier. However, a special repayment is not possible with an installment loan. As a borrower, you are also not legally entitled to a special repayment of your loan.
As a result, not all banks offer repayment in addition to your monthly installment as standard. Rather, it is helpful to ask the banks about special repayment options before taking out the loan. This also tells you what options you have and what conditions you should meet. In general: If additional payments are expected in the future, the option of special repayment is worthwhile.
How much are the costs for a special repayment?
Nowadays, you can already get rid of them for free at many banks. As a rule, the bank grants you up to five percent of the loan amount once a year as a special repayment without incurring additional costs. Other banks can also have the special repayment option paid for their loan. There is a reason for that.
The bank does not always provide the money that you borrow from the bank itself. It borrows from the capital market. This in turn creates costs for the bank in the form of interest. Real estate interest is passed on directly to you as a borrower, plus a few tenths of a percent mark-up. If you pay back your loan to the bank earlier than expected, the bank will miss interest, which it has factored into your calculations. The banks want to be compensated for this. The banks request compensation payments in two ways:
- If special payments are agreed in the contract, the borrowing rate is usually raised somewhat.
- Special repayments that have not been contractually agreed can be paid by the bank in the form of a prepayment penalty.
How does special repayment work?
The amount and amount of the special repayment are usually laid down in the contract. If this is the case, you are bound by the requirements of the contract. This means: You can only transfer the special repayment to the bank on this date. Our tip: Set up a standing order for the annual special repayment or write down the date (s) in the calendar. If you miss one of the agreed appointments, you may have to wait until the next appointment, possibly even until next year, before you can make another additional payment.
Note that this rule only applies if you have agreed free special payments with the bank. You can of course also make a special payment for your loan at any time. Then, however, a prepayment penalty will apply. Amounts paid outside of the agreed deadlines will be remitted by the lender. The same applies to amounts that do not correspond to the agreed amount. So that the bank can also classify your incoming payment in addition to your monthly installments, declare the payments as a special repayment in the “Purpose” field and add the number of your loan account. After each special payment, you can have a new repayment plan issued so that you are always up to date with the remaining term and the remaining debt.
For whom is a special repayment worthwhile?
Before you include special repayments in your loan contract, a calculation is useful. Take into account how much money is available to you each month, how much you can save and how much money can be expected annually in addition to your monthly income. If you expect regular special income, special repayments are worthwhile. Only if you regularly expect a large amount of money should you consider special repayment options.
For example, money from inheritances or donations can be invested in a special repayment. However, money from holiday and / or Christmas bonuses can also flow into your loan as a special repayment. If such money is not expected, special repayments in the contract are only worthwhile if they are offered by the bank free of charge. If not, you may sign a contract that is only expensive due to the increased borrowing rate. It is rather difficult to include special repayments in a loan afterwards. Therefore, you should take the time in advance to check all options in peace.