You have two forms of so-called strangulation credit:
- an interest credit or interest-only credit where you only pay interest and no repayment
- a revolving credit where you pay 1% per month in interest and repayment of the credit limit. But if the interest rate rises to, for example, 12%, you actually have an interest / redemption-free credit.
If you have ever taken out a revolving credit with variable interest rates and that interest has only started to rise over the years, chances are you are dealing with a strangulation loan. The interest charges have become so high that you only pay interest and pay nothing. This means that the debt remains open and your situation is hopeless.
Ultimately, there is some form of prospect on paper as you approach the maximum loan termination age. The credit must be reduced before you reach this age. This age may differ per bank. Customers are offered a higher monthly charge (depending on the interest) and the credit is blocked for withdrawals, so that the credit is compulsorily reduced. Practice shows that these customers are no longer able to bear the higher monthly costs because of their changed income / costs during the term of the loan.
Transfer strangulation credit to personal loan
The solution to get rid of your strangulation loan is to switch the 'old' revolving credit to a personal loan with a fixed interest and a pre-agreed term. Your strangulation loan becomes a 'normal' loan and you know that you will be off your loan after a certain period. The interest rate that you will pay with this new loan is a lot lower than the loan of your old revolving credit. Request a quote so that you can see in an overview what savings it will bring you each month and within what period you have repaid your loan.
Now that the (fixed) interest of a personal interest is historically low (fixed for 10 years from 4.5%), it has never been more interesting to transfer a credit to a personal loan.