Compare personal loans with flexible terms and special repayments, and reduce interest costs by up to 30 per cent
30.05.2025
7
Minutes
Katrin Straub
Managing Director at nextsure
An unexpected windfall or a pay rise could significantly shorten your path to becoming debt-free. However, rigid loan agreements often prevent this and cost you thousands of euros in unnecessary interest. A personal loan with a flexible term and the option of additional repayments is the solution, allowing you to set your own pace for repayment.
The topic in brief and concise terms
A personal loan with a flexible term and special repayments makes it possible to reduce debts more quickly and significantly lower interest costs.
The right to make special repayments is not enshrined in law and must therefore be expressly agreed in the loan agreement; often five to ten per cent of the amount can be repaid free of charge each year.
The statutory cap on early repayment charges of a maximum of one per cent of the remaining debt on instalment loans often makes refinancing financially attractive.
Reduce interest costs by up to 30% through strategic repayment
A personal loan with a flexible term allows you to adjust the monthly instalments to your financial situation. A special repayment is an unscheduled payment that goes beyond the regular instalment and reduces the outstanding balance directly. In Germany, there is no legal entitlement to special repayments; these must be agreed contractually. Many banks allow fee-free special repayments of five to ten per cent of the loan amount per year. With a loan of EUR 20,000, you can repay an extra EUR 2,000 each year and significantly reduce your interest burden. The earlier you make a special repayment, the greater the interest savings over the entire term. A loan for any purpose offers the greatest flexibility for this. This strategic approach allows you to become debt-free more quickly and significantly reduce the overall costs.
Strategically maximise financial freedom through flexible repayments
Flexible loan terms prove their value in everyday scenarios and lead to direct savings. Imagine receiving a net pay rise of 250 euros a month and using it to repay your loan more quickly. On a loan of 25,000 euros, this can shorten the term by several years and save thousands of euros in interest. A further option is to use a one-off bonus payment of 5,000 euros as an unscheduled repayment. This reduces the outstanding balance immediately and lowers all future interest charges. The benefits of flexible repayment are numerous:
Shortening the loan term by up to eight years.
Saving on interest costs, which often amount to several thousand euros.
Adjusting repayments to changed income circumstances.
Avoiding costly refinancing when interest rates change.
With an online loan repayment calculator, you can run through various scenarios. This lets you see how unscheduled repayments and repayment adjustments specifically affect your finances.
Avoid early repayment charges and save up to one percent of the remaining debt
Banks may charge a fee if you repay a loan early: the so-called early repayment charge. It is intended to compensate the bank for lost interest and is regulated by law. For consumer loans concluded after 11 June 2010, it is capped at a maximum of one per cent of the remaining debt. If the remaining term is less than twelve months, the upper limit falls to 0.5 per cent. Make sure in the loan agreement that annual special repayments up to a certain amount are explicitly free of charge. Many contracts contain clauses that allow free special repayments of five or even ten per cent per year. With knowledge of the calculation of the early repayment charge, you can avoid expensive surprises. This ensures that your flexibility is not undermined by unexpected costs.
Use loan comparison criteria to identify the best offer
To find the right personal loan, looking at the interest rate alone is not enough. A thorough comparison of the contract details is crucial to save money in the long term. You should check the following points for every offer:
Effective annual interest rate: This figure includes almost all of the costs of the loan and is the most important comparison metric.
Free overpayments: Check what percentage of the loan amount you can repay early each year free of charge.
Flexible instalment adjustments: Is there the option to increase or reduce the monthly instalment if needed?
Fees for contract changes: Some banks charge more than €100 for administrative changes.
Transparency of terms: Are all costs and options clearly and comprehensibly set out in the contract?
A TÜV-tested loan comparison offers additional security and transparency when selecting one. Only those who consider these criteria will find an offer that truly suits their needs.
Reduce monthly payments by 20 per cent through refinancing and consolidation
Advanced borrowers can use flexible loans to optimise their overall financial structure. Debt restructuring makes sense when the interest rates for a new loan are significantly lower than those of an old agreement. Our expert tip: replace costly liabilities such as an overdraft facility with a more favourable instalment loan. An overdraft often costs more than ten per cent interest, whereas an instalment loan can be had for less than five per cent. Combining several smaller loans into a single loan not only improves clarity, but often the SCHUFA score as well. A single lender is often rated more favourably than three or four creditors. With strategic loan consolidation, you reduce your monthly overall burden. This creates new financial flexibility for further special repayments or other investments.
Request a tailored analysis to optimise your financing structure
The decision to take out a personal loan with a flexible term and special repayments is a decisive step towards greater financial autonomy. It enables you to respond to unforeseen events and make direct use of financial advantages. Instead of committing yourself to rigid plans that run for ten years or more, you remain in control. Careful selection of the right offer based on criteria such as free special repayments and the option to adjust instalments is the key to success. Our experts at nextsure support you in finding the optimal financing solution for your individual situation. Request your individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
Wikipedia offers a comprehensive overview of the topic of personal loans.
Gesetze im Internet provides the official legal text on consumer loan agreements in the German Civil Code (BGB §491 et seq.).
ifo Institute offers access to academic publications and research findings in the field of economic research.
FAQ
Is there a statutory right to make special repayments?
No, in Germany there is no statutory right to make special repayments on loans. This option must always be agreed individually in the loan agreement. So check the terms carefully before you sign.
What happens if I forget to make an extra repayment?
An optional right to make unscheduled repayments usually lapses if you do not use it within the agreed period (usually per calendar year). You cannot make up the payment in the following year.
Is a loan with the option of special repayments worthwhile despite the interest premium?
It depends on how certain you are that you can expect regular additional income. An interest surcharge of, for example, 0.25 per cent can be worthwhile if you shorten the term by several years through high and early special repayments, thereby saving thousands of euros in interest overall.
Can I also pay more or less than the agreed special repayment?
Repaying less than the maximum agreed amount is usually possible without any problem. However, the bank will generally not accept an amount higher than agreed in the contract and will transfer back the excess amount.
Is refinancing always the best alternative?
Not always. Debt restructuring only makes sense if the interest savings from the new loan outweigh the costs of the early repayment penalty on the old loan. Calculate carefully before you decide.
Will consolidating loans improve my credit rating?
Yes, consolidating several small loans into a single one can have a positive effect on your SCHUFA score. A single, properly serviced loan is often rated more favourably than many small liabilities with different creditors.
