Reschedule your Santander loan and reduce the instalment by up to 30 percent
30 Apr 2025
8
Minutes
Katrin Straub
CEO at nextsure
Is your monthly loan payment at Santander Bank too high? Have you been repaying an expensive old loan for years while market interest rates have dropped? Discover how a strategic debt restructuring can reduce your financial burden by up to 30 percent and help you regain control of your finances.
The topic in brief and concise terms
Refinancing is worthwhile if the new interest rate is at least two percentage points lower than the old one.
The legally capped early repayment penalty amounts to a maximum of one percent of the remaining debt and is usually lower than the interest savings.
By consolidating several loans (overdrafts, credit cards), the total monthly burden can often be reduced by more than 20 percent.
Potential analysis: When refinancing makes sense
Refinancing your Santander loan is particularly advisable if your contract was concluded more than two years ago. Often, the interest rates for old loans are above seven percent, while new offers are available from under three percent. For an outstanding balance of 15,000 euros, an interest differential of four percentage points can mean a saving of over 1,000 euros over the remaining term. You achieve the greatest savings, the higher the outstanding balance and the longer the remaining term. Refinancing an expensive old loan is thus an effective lever to optimise your finances. This interest difference is the primary driver for the decision to refinance.
Cost factor prepayment penalty: A calculable hurdle
When you repay your Santander loan early, the bank incurs an interest loss, which they charge you as an early repayment fee. The amount of this fee is clearly regulated by law and for installment loans, it may amount to a maximum of one percent of the remaining debt. If the remaining term of your loan is less than twelve months, this rate even drops to 0.5 percent. So for a remaining debt of 10,000 euros, this would be a maximum fee of 100 euros. These costs are often significantly lower than the interest savings from the new, cheaper loan. An online calculator for early repayment fees helps with the precise calculation. Therefore, the fee should be considered an investment in lower interest charges.
The Path to a Cheaper Loan: A Four-Step Guide
A successful debt rescheduling can be divided into four manageable phases, leading systematically to the goal.
Accurately determine the remaining debt: Request a current statement of the remaining debt from Santander Bank, including any prepayment penalty.
Compare offers: Use independent comparison portals to find a new loan with the best possible interest rate. Pay attention to the annual percentage rate (APR).
Conclude a new loan agreement: After a positive credit check, conclude the new, more affordable loan agreement. Many providers now enable this fully digitally in under ten minutes.
Have the old loan paid off: The new lender transfers the agreed amount directly to Santander Bank, thus fully settling the old contract.
With a new long-term loan, you can further reduce the monthly burden. The next step involves consolidating multiple financings.
Financial Clarity: Consolidating multiple loans into one
Many households have not only a personal loan but also an expensive overdraft or credit card debts with interest rates over ten percent. Debt consolidation offers the perfect opportunity to bundle these various liabilities. Instead of paying three or four instalments to different creditors, you have just one manageable instalment. This not only reduces administrative effort but often lowers total costs by more than 20 percent. By combining multiple loans, you regain financial control. This consolidation is an important step towards financial well-being.
Expert Tips: Maximize Savings and Avoid Pitfalls
To fully realise the potential of debt restructuring, you should consider some expert tips.
Cancel residual debt insurance: Once the old loan is repaid, the purpose of the often costly residual debt insurance expires. You have a special right of termination and are entitled to a proportional refund of the premium.
Check withdrawal option: Many older credit agreements (before June 2010) have faulty withdrawal instructions. A withdrawal could completely eliminate prepayment penalties.
Optimise SCHUFA score: A good credit score is essential for obtaining top interest rates. Check your entries before applying and have any incorrect data corrected.
Specify the purpose of use: Always state "debt restructuring" when applying for a loan. Some banks offer special conditions for this purpose, which can be up to two percentage points cheaper.
Even a debt restructuring despite negative SCHUFA is possible with specialised providers under certain conditions. The final step is the formal processing with the bank.
The final step: Formal termination at Santander Bank
Once the new loan agreement is signed, the repayment of the old loan must be formally initiated. For this, your new financing partner will need a redemption statement issued by Santander Bank. This document lists the exact remaining debt as of the effective date and includes the bank details for the transfer. You can often request this certificate directly through Santander's online banking with just three clicks. Allow approximately five to ten working days for the entire processing. After successful repayment, you will receive written confirmation from both banks. With this, the debt restructuring is complete and you benefit from your new, lower rate.
Request an individual risk analysis now: Have your insurance situation checked for free and receive concrete optimisation suggestions.
More useful links
The Federal Statistical Office provides tables and information on over-indebtedness in Germany.
The Deutsche Bundesbank provides statistics on interest rates and yields for consumer loans to private households.
The Consumer Centre offers helpful tips on saving money on loans and credits.
Wikipedia offers a comprehensive article with definitions and explanations on the topic of debt restructuring.
Statista presents a thematic page with current statistics and data on loans and debts.
The Federal Ministry of Finance informs about federal borrowing within the economic and financial context.
The Consumer Centre provides clarification on the revocation of loans and the impact of an EU court decision.
FAQ
What documents do I need for a debt restructuring?
Usually, you will need the last three payslips, a copy of your employment contract, the existing loan agreement with Santander Bank, and a current statement of the remaining debt.
How long does refinancing take?
The entire process from requesting a quote to the final settlement of the old loan typically takes between five and ten working days, depending on the speed of the banks involved.
Does debt restructuring improve my SCHUFA score?
In the short term, the credit inquiry can slightly lower the score. In the long term, consolidating multiple loans into one and making reliable installment payments can positively impact your SCHUFA score.
Are any fees incurred for the calculation of the prepayment penalty?
No, the bank is not allowed to charge fees solely for the calculation of the compensation. However, there may be a processing fee for handling the early repayment, which often ranges between 100 and 200 euros.
Can I also refinance a car loan with Santander?
Yes, the rules for rescheduling a personal loan generally also apply to a car loan. You can also repay this early to benefit from better interest rates.
What is the difference between the nominal interest rate and the effective interest rate?
The nominal interest rate refers to the pure cost of borrowed money. The effective annual interest rate includes almost all additional costs of the loan, such as processing fees, and is therefore the crucial value for comparing loan offers.
