Loans help considerably in many life situations. One only has to imagine how many people would be able to fulfill the dream of owning their own home if there were no loans. See http://nelshael.com for further editorial
Loans are therefore in many areas, whether in real estate finance, automotive financing or for very different plans and desires, the order of the day. But what if the personal situation suddenly changes?
Uncertain conditions in the repayment phase
Most people make a loan for a specific purpose, assuming that their planned financial position remains the same or develops as planned. This is particularly well explained by the example of student financing.
The student concludes a loan to finance his studies, assuming he will then get a well-paid job that will allow him to repay the loan.
Of course, there are hedges in such cases, if a repayment is not possible. From guarantees to life insurance there are several mechanisms to protect against insolvency.
But what if the situation changes very positively? Consideration should also be given to this situation, because it does not occur that often.
A loan then causes costs that are not really necessary due to the changed situation. Here only helps a loan with special repayment.
Long-term loans require long-term considerations
Especially in the case of long-term loans, such as a student loan or real estate financing, care should be taken to conclude a special repayment loan.
Only then can you be sure that you can optimally adapt the repayment phase to your own needs. Even if there is no evidence to suggest that funds are available for special repayments before taking such a loan, this possibility should be included. For long-term loans also require long-term considerations.
If there is money left over, you will be happy about the loan with special repayment, as this will usually shorten the repayment period considerably.
Just in case
A loan should therefore preferably be concluded with the possibility of free special redemptions. So you also make your own financial options as flexible as possible. And as there are often unexpected cases, both in the negative and the positive direction, the special repayment loan is always the better solution. Because a faster repayment thanks to this option also means greater financial freedom in the entire planning. Depending on how wishes and plans change, the loan can be repaid on schedule or just prematurely.