Refinancing for the self-employed: Reduce fixed costs and increase liquidity
3 Jul 2025
4
Minutes
Katrin Straub
CEO at nextsure
Are high monthly loan repayments straining your cash flow as a self-employed individual? A well-planned refinancing can reduce your fixed costs by up to 30 percent. This article will show you how to reorganise your finances in just a few steps and efficiently eliminate costly old loans.
The topic in brief and concise terms
A debt restructuring can reduce monthly payments by up to 30 percent and consolidate multiple loans into a single one.
Important prerequisites include at least two years of self-employment and a positive credit check (SCHUFA).
The prepayment penalty for the old loan must not exceed the interest savings from the new loan.
Precisely analyse the financial situation
The first step to successful refinancing is a thorough assessment of your finances. List all existing loans with outstanding balance, interest rate, and monthly installment. For example, a freelancer pays a total of 750 euros per month for three small loans. A clean documentation forms the foundation for all further steps.
An up-to-date business analysis (BWA) is the most important document for banks. It provides insights into your earnings position and shows stable business development. Also, have the income tax assessments for the last two to three years ready. These documents demonstrate your ability to service the new, more favorable loan. Careful preparation often shortens the approval process by several weeks. This creates a solid basis for negotiations with potential new lenders.
In four steps to optimised loan conditions
A structured process is crucial to securing the best terms. Following these steps, you will reach your goal efficiently:
Determine the exact total of all loans to be consolidated. Consider any possible early repayment fee, which can be up to one percent of the remaining debt.
Obtain at least three different loan offers to compare interest rates and terms. Even an interest rate difference of 0.5 percentage points can mean savings of thousands of euros over the term.
Submit the application fully with all the required documents. This includes the BWA, current bank statements, and the latest tax assessments.
After approval, the new bank will directly pay off the old loans. From now on, you will have only one installment to a single creditor, simplifying your bookkeeping by up to 50 percent.
By consolidating multiple loans, you not only improve your terms but also your SCHUFA score. How you consolidate multiple loans is an important part of the process.
Requirements for a Successful Debt Restructuring
Banks scrutinise self-employed individuals more rigorously than employees, as their income tends to fluctuate more. Therefore, a positive credit rating is the most crucial requirement for a loan approval. A negative SCHUFA entry almost always leads to rejection. Most lenders require at least two years of self-employment. You can prove this with your tax assessments and a complete business evaluation (BWA). The following documents are generally required:
Current business evaluation (BWA)
Income tax assessments from the last two to three years
Income surplus statement (EÜR)
Valid identity card or passport
Bank statements for the last three months
Contract documents of the loans to be repaid
Our expert tip: If you have assets such as a property or a whole life insurance policy, these significantly enhance your chances of getting the best conditions. A loan despite a negative SCHUFA is only possible under special circumstances.
Realise interest savings and long-term savings potential
The primary goal of refinancing is to reduce interest charges. Even an apparently small difference in interest rates can have significant effects. Reducing the interest rate from seven percent to four percent on an outstanding debt of 30,000 Euro saves more than 2,500 Euro in interest costs over a five-year term. The monthly payment decreases by over 40 Euro.
The interest rates for installment loans are often significantly lower than those for an overdraft. Many self-employed individuals use the expensive overdraft for bridging, which often incurs interest rates of over twelve percent. Refinancing the overdraft with an installment loan can reduce interest costs by more than 60 percent. A business loan for freelancers can be an appropriate solution here.
Weigh risks and avoid costly mistakes
Refinancing is not always the best solution. A central risk is the early repayment penalty. This fee is charged by the old bank for the loss of interest profit. For installment loans, it is legally capped at a maximum of one percent of the remaining debt, or 0.5 percent if the remaining term is less than a year. If this fee exceeds the interest savings, switching isn't worthwhile.
Also pay attention to the overall term of the new loan. A lower rate due to a longer term can ultimately lead to higher total costs. Therefore, always compare the total interest expense over the entire term. Sometimes, refinancing to avoid insolvency can also be a last option. Carefully weigh all factors before making a decision.
Expert Tip: Take advantage of the tax benefits of refinancing
What many self-employed individuals don't know: The interest on a business loan is tax-deductible. This also applies to the interest on a debt restructuring loan, provided it is used for financing the company. The interest costs reduce your taxable profit and thus lower your tax burden. Assuming a tax rate of 30 percent, this means an effective saving of 300 euros for every 1,000 euros of interest paid.
Even the costs of the restructuring itself can often be claimed as business expenses. These include, for example, processing fees or notary costs. Precise documentation of all expenses is crucial here. Talk to your tax advisor to fully exploit all tax benefits and further optimize your financial planning. This is particularly relevant for artists with irregular income.
Request a personalised risk analysis now
Debt restructuring offers great opportunities, but also involves risks. nextsure supports you as a digital insurance portal in analysing your financial situation. Have your insurance situation and financing structure checked free of charge and receive concrete optimisation suggestions. This way, you can make an informed decision for your financial future.
More useful links
Statista provides statistics on loans to companies and the self-employed.
Statistisches Bundesamt provides information on business registrations and insolvencies in Germany.
Deutsche Bundesbank offers detailed credit data as part of the ANACREDIT survey.
IHK München provides a guide on liquidity planning in crisis management.
Institut der deutschen Wirtschaft Köln publishes a report on the situation of the self-employed in Germany.
Deutscher Bundestag offers current brief news which may also cover economic topics.
KfW provides information and analysis on the development of business start-ups in Germany.
Bundesministerium für Wirtschaft und Klimaschutz offers a comprehensive dossier on SME financing.
Statistisches Bundesamt publishes a report on financial resources for small and medium-sized enterprises (SMEs).
FAQ
Which documents are most important for refinancing as a self-employed person?
The most important documents are a current business evaluation (BWA), income tax assessments for the last two to three years, and a clean SCHUFA record. These documents demonstrate your creditworthiness and the financial stability of your business.
Is it worth refinancing even with small loan amounts?
Yes, even for smaller amounts, refinancing can be worthwhile, especially if you have several small loans or an expensive overdraft. Consolidating them improves clarity and can lead to a noticeable reduction in monthly burdens, even with smaller amounts.
What happens if my debt restructuring application is rejected?
A rejection is usually due to a negative credit rating or insufficient proof of income. Analyse the reasons, improve your credit rating if necessary through timely payments, and try again after a few months or explore alternative financing options.
Can I make special repayments during the refinancing?
Most modern debt restructuring loans offer the possibility of free special repayments. When choosing a new loan, pay attention to this option. It allows you to repay the loan more quickly in good business conditions, thereby saving additional interest costs.
