What is it exactly and how does it work?
A pre-financing loan is a special type of loan that provides a preliminary financing of an amount to be received at a later date. Often, this form of credit is used to benefit from life insurance or Creditor contracts earlier, even if they are paid later. Furthermore, it is possible to use the loan to realize a pre-financing for the sale of land or buildings.
In most cases, a pre-financing loan is a so-called interest payment loan. This means that the borrower only has to pay the interest on the loan without at the same time paying off his debt. The actual loan amount will be repaid in one go at a later date.
Where can I apply for a pre-financing loan?
There are many banks, building societies and even insurance companies offering a pre-financing loan today. The individual offers differ primarily in their terms, which are set individually by each bank and often have to do with the creditworthiness of the borrower. Comparing the offers with one another often shows that building societies and life insurance companies in particular offer very attractive interest rates. So worth a comparison in any case.
As with any other loan, the borrower must first wait for the outcome of the credit check conducted by the banks. Pre-funded contracts are also attached to the respective bank or assigned.
If the sale of a house or land is carried out through pre-financing, the Bank will generally encumber it with land charges. In addition, she can already request part of the proceeds from the sale to the notary.
What also needs to be considered in a pre-financing loan?
However, the classic pre-financing loan can not only be used for contracts that already exist over a longer period of time – there are also loans that can be taken out when you have just concluded a home savings contract. The advantage here is that the borrower immediately gets the desired loan amount paid into his account and only has to pay the loan interest. At the same time, the savings phase of the building society savings contract continues. After the end of the savings phase, the pre-financing can be repaid directly, as the accumulated credit contract is due.
If a pre-financing loan is to be used to finance an existing contract, this option is particularly useful if you want to avoid a contract termination. In fact, the surrender value for annuity or life insurance that you would receive in the event of termination is a much lower amount than what you would receive later at maturity.
With a pre-financing, however, this amount can be secured in advance and you thus – despite additional costs for the accrued interest – a more favorable decision.
How do you find the cheapest pre-financing loan?
Both life insurance companies and building societies and sometimes even ordinary banks now offer pre-financing loans. However, it is becoming increasingly difficult for consumers to find an offer that suits their own needs. Above all, the large selection of tariffs makes it difficult to put the conditions facing each other.That’s why, as a first step, you should always do a credit comparison on the Internet, which can locate all the banks that offer a pre-financing loan as a product.
Not only are credit comparisons completely free of charge, but they are also very easy and quick to carry out: All you have to do is enter some relevant data into a search mask, which can then be evaluated within a few seconds. Now you just have to select the right offer and can be forwarded directly to the bank.
As a rule, all documents can now be filled in electronically, but many banks still frequently require paper copies when it comes to proof of income or building society savings contracts. Once all documentation has been submitted in full, the Bank will review it and will, after a credit check, notify the applicant after a few days whether the pre-financing loan has been approved.