Debt consolidation loan with instant approval: How to cleverly pay off expensive old loans and reduce your monthly installment
4 May 2025
11
Minutes
Katrin Straub
CEO at nextsure
Are high interest rates on old loans straining your monthly budget? A debt restructuring loan with immediate approval can significantly reduce your financial burden. Discover how you can replace an expensive old loan in just a few steps, reduce your instalments by up to 50 percent, and regain full control over your finances.
The topic in brief and concise terms
A debt restructuring loan with immediate approval can reduce the monthly payment by up to 50 percent and shorten the process to a few days.
The early repayment penalty for consumer loans is legally limited to a maximum of one percent of the remaining debt.
After ten years, loans with long-term interest rates can be terminated without additional costs (§ 489 BGB).
Reduce your interest burden: Why reviewing old loans is now worthwhile for you
Old loan agreements often have a significant disadvantage: high interest rates that can cost hundreds or even thousands of euros over the years. A personal loan with an interest rate of seven percent was common a few years ago, but today, often only three to four percent is due. This difference of just three percentage points can mean savings of over 900 euros on a remaining debt of 15,000 euros over a period of four years. Many overlook that consolidating several small loans into a single loan improves clarity and the credit score. Reviewing existing agreements is the first step to unlocking this saving potential. With a favourable debt restructuring loan, you can often noticeably reduce the financial burden immediately. The analysis of your current conditions quickly shows whether paying off residual debt is worthwhile for you.
Faster Relief: The digital application for a debt consolidation loan with immediate approval
A debt restructuring loan with immediate approval significantly accelerates the entire process of settling the loan. Thanks to digital methods, you often receive a preliminary loan approval within 30 seconds. The application is completed entirely online, without any tedious paperwork. Instead of waiting for weeks, disbursement is often possible within a day. On request, the bank even takes care of the entire process and terminates the old loan for you. To ensure a smooth process, you should have some documents ready. Here is a list of typically required documents:
A valid identity card or passport for identification.
The last three salary statements for credit assessment.
The loan agreement to be settled with the outstanding balance specified.
Bank statements for the last four weeks.
With a complete digital loan application, you create the basis for a fast and uncomplicated process. This will efficiently lead you to better conditions and financial relief.
Expert tip: Minimize early repayment charges and leverage legal benefits
When a loan is repaid early, the lender often requires an early repayment fee to compensate for lost interest. However, the amount of this fee is clearly regulated by law. According to § 502 of the German Civil Code (BGB), for consumer loans, the fee must not exceed one percent of the outstanding balance. If the remaining term is less than twelve months, the rate even drops to 0.5 percent. Our expert tip: Check your termination rights under § 489 BGB. Loan agreements with a fixed interest period of more than ten years can be terminated completely free of charge after this period, with six months' notice. This regulation offers significant savings potential that many borrowers are unaware of. Therefore, a discussion about the calculation of the early repayment fee can be worthwhile. This ensures that you do not pay more than necessary and take advantage of all legal possibilities.
Practice Check: When refinancing really makes sense for you
A debt restructuring is particularly advisable when you can benefit from significantly lower interest rates or consolidate multiple loans. A typical scenario is the payoff of an expensive overdraft facility, which often carries interest rates of over ten percent. By converting it into an installment loan with an interest rate of four percent, you save real money. A concrete example illustrates the potential:
Old loan: Remaining debt 10,000 Euros, interest rate 8 percent, monthly payment 244 Euros.
New debt restructuring loan: Loan amount 10,000 Euros, interest rate 4 percent, monthly payment 226 Euros.
Savings: You save 18 Euros per month and are over 850 Euros better off with the same term.
Particularly with the consolidation of multiple loans, a dual advantage arises: You not only reduce the total payment but also improve your financial overview. Instead of making three or four payments to different creditors, you only service a single, more affordable loan. Such a consolidation of loans leads to more order in your finances. The next step is to check how this affects your credit rating.
Optimising Credit Rating: How Debt Restructuring Affects Your Schufa Score
Refinancing can positively affect your Schufa score if done correctly. Consolidating multiple small loans into a single loan is often considered by Schufa as a sign of financial organisation. Instead of managing three or four lines of credit, demonstrating with a single payment shows reliability and clarity. It's important to ensure when obtaining offers that the bank only makes a “credit condition inquiry”. This is Schufa-neutral and, unlike a fixed “credit inquiry”, does not affect your score. An improved score could enable you to access even better interest rates in the future. The elimination of an overdraft that is constantly in use through a term loan is also viewed positively, as this is regarded as more sustainable financial management. By refinancing, you not only optimise your current costs but also invest in your future financial flexibility. Request an individual risk analysis now: Have your insurance situation checked for free and receive specific optimisation suggestions.
More useful links
Bundesministerium der Justiz und für Verbraucherschutz provides the complete text of § 491 BGB, which governs the legal framework for consumer loan agreements.
Bundesarbeitsgemeinschaft Schuldnerberatung e.V. offers comprehensive information and support concerning debt counselling and financial over-indebtedness.
ifo Institut explores household debt in Germany in this article and presents current research findings.
FAQ
What is the early repayment fee for refinancing?
For consumer loans concluded after 10 June 2010, the early repayment penalty may amount to a maximum of one percent of the remaining loan balance. If the remaining term is less than a year, it is only 0.5 percent.
What does instant approval mean for refinancing loans?
Immediate approval means that after an automated online review of your data, the bank makes a preliminary credit decision within minutes. The final approval and disbursement occur after successful identification and final review of the documents.
Does the new bank take over the redemption of the old loan?
Yes, many banks offer a transfer service. With a power of attorney for settlement, they take care of terminating the old loan and transferring the remaining debt to the old bank, which significantly simplifies the process for you.
Can I also use a debt restructuring loan for additional funding?
Yes, as part of a debt restructuring, you can often increase the loan amount as well. This not only pays off the old loan, but also gives you additional financial flexibility for other projects.
What documents do I need for the application?
Typically, you will need proof of identity (ID card), recent income statements (pay slips), bank statements, and the contract details of the loan to be refinanced, including the current outstanding balance.
Is there a way to completely avoid the early repayment fee?
Yes, if your loan agreement has a fixed interest rate for more than ten years, you can terminate it after the ten years have passed, in accordance with § 489 of the German Civil Code (BGB), with a notice period of six months, without having to pay an early repayment penalty.
