Debt tranche of term loans. Even if your fixed interest period is still three years, you can still find out today about your follow-up loan. Here you will find important questions and answers regarding the processing of term financing. and, if necessary, used for debt restructuring.
The forward loan is a form of follow-up financing and replaces the initial funding. The cost of a term loan in case of debt restructuring.
Debt rescheduling/term loans
Because of the current favorable interest rates, I have opted for a forward loan for, since my follow-up financing is due only Oct 2019……. 50/50, but I think the interest rates will be in the next 1.5 Not so cheap for a few years ….. have long researched and for my part got a benevolent course and also finished.
Mortgage loan financing can be an attractive way to maintain low-interest rates in low-interest rates. Below is more information on when term loans pay off. Which are term loans?
Term loans are loans that are used to finance real estate and are granted as “normal” real estate loans as annuity loans with security in the land register.
A key differentiator is that although term loans are already concluded at a fixed interest rate today, they will only be paid out after a certain period of time.
A distinction is made between forged and real term loans: In the case of non-original term loans, the fixed interest periods start with the date of the loan contract.
The fixed-rate period, on the other hand, starts with the distribution of real-term loans and then extends over the entire term of the loan. In general, the problem of a forward loan arises as part of the follow-on financing of real estate loans.
If interest rates today are – as they have been for many years – particularly low and you expect interest rates to rise again in the period that followed, it makes sense to consider a term loan.
With a forward contract, you can buy interest-rate securities. Even today, you know that even after the end of the commitment period a follow-up loan is available at the current interest rate level for your current mortgage lending.
The “course” for this interest rate hedge is that lenders charge term premiums in comparison to instant-pay loans. The risk of futures contracts becomes apparent when market interest rates continue to fall or remain constant.
It would then have been more advantageous to forego the forward agreement and decide on follow-up financing at the then applicable interest rate level.
Interest rate forecast is extremely complicated
The interest rate forecast is extremely complicated, so you should check which lead time or deadline of the term loan you want to commit.
Alternatively to a term loan, a rescheduling of the existing real estate loan can also take place. However, credit institutions often demand higher prepayment penalties for the early repayment of loans, which makes debt rescheduling unattractive.
Term credits offer interest and plan security for your mortgage lending.