Would you like to repay an existing loan early to save interest? – With our calculator, you can easily estimate the redemption amount based on the original key data of your loan so that nothing stands in the way of your early repayment.
Determine the redemption amount with our loan redemption calculator
>> Would you like to pay off your existing loan with a new, cheaper loan (debt consolidation) instead of using your own funds? – Compare suitable loans with us!
Basics of the redemption amount
What is the redemption amount?
The redemption amount is the sum you have to pay to settle your loan in full before the end of the term. It consists mainly of the remaining debt, i.e. the original loan amount less the principal already repaid. In Germany, consumers have the legal right to repay a consumer loan early at any time, in full or in part (section 500 BGB). No further interest is incurred for the period after repayment. However, for loans with a fixed interest rate, the bank may charge an early repayment fee (Vorfälligkeitsentschädigung). For consumer loans, this is capped at 1% of the amount repaid early, or 0.5% if the remaining term is less than one year, and may not exceed the interest you would have paid until the end of the term (section 502 BGB).
Advantages of early loan repayment
Early loan repayment offers significant advantages, particularly in terms of savings and flexibility:
- Interest savings: By repaying your loan early, you save the interest that would have accrued over the remaining term. This can be a considerable sum, especially with a high loan amount, high interest rates and long terms – even after deducting any early repayment fee.
- Immediate debt reduction: You reduce your total debt immediately, which eases your monthly budget as the loan instalment is eliminated.
- Better credit rating: A loan that is settled as agreed is recorded as completed at SCHUFA and no longer counts as an existing obligation. This puts you in a better position for potential new loans.
- Increased financial flexibility: After repaying the loan, you have more money available for other expenses or investments.
- Psychological benefit: The feeling of being debt-free can have a positive impact on your quality of life and contribute to a more stress-free lifestyle.
These advantages make early loan repayment an attractive option for borrowers who want to improve their financial situation.
Loan redemption calculator: a useful tool
How does the loan redemption calculator work?
The redemption calculator is an online tool that helps you determine the remaining debt on your loan quickly and easily. You simply enter the original loan amount, the interest rate, the date of the first instalment and the amount of the monthly instalment. The calculator then shows you the remaining debt for each month. Please note: any early repayment fee charged by your bank is not included and must be added.
Using the calculator to optimise your finances
The redemption calculator is not only a tool for calculating your redemption amount, but also for financial planning. Here are some ways to use it:
- Compare different scenarios: Experiment with different repayment schedules to see how quickly you can pay off your loan.
- Financial decision-making: The calculator helps you assess whether it makes financial sense to pay off your loan now or at a later date.
- Long-term financial planning: Knowing your potential redemption amount helps you plan other financial commitments or investments.
The loan redemption calculator gives you the transparency you need to make smart decisions about your loans.
Calculating the redemption amount: step by step
How is the redemption amount calculated?
The redemption amount is based on the remaining debt on your loan, i.e. the original loan amount minus the principal already repaid, plus any early repayment fee. Follow these steps:
- Determine the original loan amount: This is the net loan amount you took out at the start of your loan agreement.
- Deduct the principal already repaid: The monthly instalment of an instalment loan always consists of a repayment portion and an interest portion. Only deduct the repayment portion from the original loan amount.
- Add any early repayment fee: The remaining debt plus any early repayment fee is the amount you have to pay to settle your loan in full.
Example calculation
Let us illustrate this with an example:
- Let’s assume you have taken out a loan of EUR 50,000.
- Over the years, you have repaid a total of EUR 20,000 in principal (repayment only! Including interest, you will of course have paid more to the bank).
- Your remaining debt would then be EUR 50,000 – EUR 20,000 = EUR 30,000. With a remaining term of more than one year, an early repayment fee of max. 1% (here max. EUR 300) may be added.
Thanks to the statutory cap on early repayment fees for consumer loans in Germany, early repayment usually pays off, as the interest saved is often considerably higher than the fee.
Repaying a loan early: Process and implications
What happens to interest in the event of early repayment?
If you repay your loan early, no further interest is charged from the date of repayment. Since the interest for past months was already included in the instalments paid and the redemption amount is based on the remaining debt, all interest obligations are settled with the repayment. You therefore save the interest you would otherwise have paid for the rest of the originally agreed term.
Is it possible to pay the remaining debt in one go?
Yes, in Germany you have the legal right to repay a consumer loan early at any time. This means you can settle your entire remaining debt in a single payment. This is particularly useful if you have the necessary funds and want to benefit from the interest savings.
You can also repay only part of the remaining debt with a special repayment – this right also applies to consumer loans.
>> Click here for the loan budget calculator.
Checking the loan agreement: Important aspects
Before you repay your loan early, check your loan agreement carefully. Pay attention to:
- The exact conditions for early repayment and any early repayment fee.
- The calculation method for the remaining debt.
- Any administrative steps required for the repayment, e.g. requesting the exact redemption amount from the bank.
Ask your bank for a written statement of the exact redemption amount on a specific date. If you have any questions about your existing loan, send an e-mail to info@kredit-fuchs.de and we will get back to you as soon as possible.
What is an early repayment fee?
In Germany, banks may charge an early repayment fee (Vorfälligkeitsentschädigung) if you repay a fixed-rate loan before the agreed end date. It compensates the bank for lost interest. For consumer loans, the fee is limited by law to 1% of the amount repaid early (0.5% if the remaining term is less than one year). For real estate loans, different and usually higher amounts apply; there are corresponding calculators online. For loans with a variable interest rate, no early repayment fee may be charged.
Conclusion: Optimise your finances by paying off your loan wisely
Early loan repayment in Germany is a great opportunity to optimise your finances and increase your financial freedom. Thanks to the statutory right to early repayment and the capped early repayment fee for consumer loans, you have a lot of flexibility. This enables you to make strategic decisions that can have a positive impact on your financial future.
Important takeaways
- Interest savings: By repaying the loan early, you save interest, which can lead to considerable savings.
- Clear rules: Thanks to the clear legal regulations in Germany (sections 500 and 502 BGB), early repayment of consumer loans is straightforward and the costs are predictable.
- More financial freedom: Repaying a loan gives you more room in your budget and lets you use your money for other important projects or investments.
Closing words
As an independent loan comparison service for Germany, we give you the tools and information you need to make smart decisions about your loans. Our loan redemption calculator is a simple but powerful tool to help you see your financial options clearly.
By the way: If you would like to take out a new loan to pay off your existing one (debt consolidation), you can compare suitable offers with us! If a loan was taken out during a period of high interest rates, it may make sense to refinance it today at more favourable rates – even taking the early repayment fee into account.