Early exit from expensive loans is often possible

The historic low interest rates are favorable for those who are currently entering into a loan agreement. In particular, construction loans with their long terms can be a few thousand USD cheaper than a few years ago.

If you want to get rid of such a current loan with high interest rates and continue to finance the remaining amount with a cheap loan, you actually have to pay the prepayment penalty to the bank. These in turn reduce the savings considerably. Add to that the effort.

Invalid cancellation policy

According to the law, a valid credit contract includes a cancellation policy in which the customer is informed about his right of cancellation. This means that he can cancel the contract within 14 days without giving any reason. Now the consumer advice centers have checked revocation instructions for almost 10,000 loan contracts and found that 80 percent of them were incorrect. Loan agreements that were concluded between November 2002 and mid-2010 are relatively easy to estimate and can therefore be challenged.

From 11.06.2010 the legal situation was changed significantly and the necessary examination is then more difficult and must be carried out in more detail. But even with these contracts, it can be worth checking whether there is an option to object.

With contracts prior to 2002, something can be done in particular if it is a question of door-to-door sales.

The important thing is: each case and contract is different and must be examined individually.

If, from the expert’s point of view, the instruction is invalid, the contract can still be revoked years later if the 14-day period has long passed. In this case, the prepayment penalty also does not apply.

How do I proceed with the revocation?

How do I proceed with the revocation?

The first thing to consider is whether a revocation would be worthwhile. If the remaining debt is relatively high and the contract runs for a few more years, it is worth examining it closely. Before you go to your bank, you should definitely have a lawyer or a consumer protection expert examine the contract. If the answer is in the affirmative, you should also take care of follow-up financing.

But be careful: the subject of consumer credit law is complex and the legal situation has changed several times. Not every lawyer is the right contact for this. Even a specialist lawyer for banking law or investment law is not always the right choice. The lawyer should therefore be carefully selected and the lawyer should be thoroughly familiar with the area in order to assert himself against the bank.

However, the chances of success are assessed differently: consumer advocates prefer to lower expectations and warn of lengthy legal disputes. Lawyers specializing in the field and successful here, however, make good forecasts. Experience has shown that the revocation is easier to enforce at savings banks as well as Volksbanken and Raiffeisenbanken than at large banks, which are more concerned with a legal process.

Even if you have processed a loan early and paid the prepayment penalty, experts still have chances. Under certain circumstances, you can then not only request this compensation back, but also compensation for the use of interest and principal payments that have already been made.


With a successful revocation and further financing at the current low interest rates, thousands of USD can be saved. Two percent are already making themselves felt here. In any case, one should not enter this legal thicket without professional support.

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