The integration of subsidies into the construction financing is popular, especially Personal Payday loans are well received by builders and buyers. But after a few years, the development loans run out and often there is still a residual debt that has to be financed again. We would like to present the individual possibilities today.
The purpose of Personal Payday Loans
But first, a few words on the actual integration of Personal Payday loans into home loan financing. Personal Payday Bank offers various promotional loans, which in turn serve as an incentive. Depending on the loan program, they should motivate, for example, the acquisition of home ownership or the construction of particularly energetic homes. To this end, borrowers benefit from subsidized interest rates that promise a financial advantage.
The individual Personal Payday loans are linked to fixed interest rates. This means that the respective subsidy rate is fixed for a certain period of time. At the end of the fixed interest period, the loan expires and usually a residual debt remains. Borrowers must then decide how to proceed with this financial liability.
Variant 1: Replacement with own funds
The best solution is to replace the remaining debt with equity. In other words, the loan is repaid so that there are no further financing costs (eg interest). But only very few homeowners can in the meantime make such high savings, make an inheritance or win the lottery. Thus, this variant is rarely in question.
Option 2: Extension of the loan with Personal Payday
If you want to continue your financing, you can stay with Personal Payday Bank (also called prolongation). Follow-up financing is offered for most promotional loans. Interest rate and fixed interest rates are newly agreed, then it continues to the new conditions.
This variant may sound very reasonable at first. However, there is a catch. In the case of follow-up financing via Personal Payday Bank, there are no longer any promotional terms. Instead, market conditions are set, which are usually higher than the interest rates of cheaper banks. Thus, there is a risk of unnecessarily high costs with a rollover.
Variant 3: follow-up financing at another bank
Only in very rare cases is the home completely financed through Personal Payday loans. Almost always there is another real estate loan that comes from another bank. As a rule, it is easily possible to accommodate the remaining amount of the Personal Payday loan with this bank or to obtain a supplementary follow-up financing there.
Ideally, all loans expire at the same time. Then it would even be possible to make a rescheduling and summarize the sum of the individual remaining debt amounts in a loan and possibly to change to another bank. Such a step can make sense if attract better conditions there.
Unfavorable fixed interest rate elected? Here is our practical tip!
Not all real estate loans are always subject to the same fixed interest rate. Especially with Personal Payday loans, shorter terms are not uncommon. In such cases, the above-mentioned solution is recommended, ie the remaining debt is placed with the existing bank. However, it must be ensured that the fixed interest rates are congruent, ie agree with each other and end at the same time. The advantage of such a solution is to later summarize the total remaining debt amounts and, if necessary, to be able to change the bank.
Example: Assuming that the main loan has a fixed term of 15 years, the Personal Payday loan expired after only 10 years. Then it makes sense to finance the remaining amount of the Personal Payday loan over 5 years.
No reason for uncertainty – we advise you comprehensively!
Granted, the whole topic can seem complex and confusing. It is therefore all the more important to seek advice from a competent financing expert. Our specialists offer independent and therefore neutral advice. Your Personal Payday loan expires and you want to know more about your concrete possibilities? We are happy to help!