Many of the old creditors are unaware that they have the opportunity to convert their credit to a more favorable one. So it is worth looking at the branch offices for the conditions under which you can get rid of your old type of loans and change the entire debt again.
The Law on Transparent Pricing has allowed creditors to swap sub-standard mortgages for new ones. That is, a loan that is not linked to a reference rate or has a 3 or 5 year interest rate can be converted.
New loan must already meet the above conditions
After the switch, the new loan must already meet the above conditions, and the switch is completely free of charge for clients under the Credit Institutions Act.
In the case of a mortgage loan with a term of more than one year before April 1, 2012, if it does not comply with the provisions of Article 280, the consumer may, at any time, request modification or replacement of the contract to comply with the provisions of $ 280 by making the new loan
- a dollar loan, if the original loan is a dollar loan,
- a euro loan, a euro loan or a dollar loan, if the original loan is a euro loan, a euro loan or another foreign currency loan.
- a Swiss franc credit, a Swiss franc-denominated loan, a euro-denominated loan, a euro-denominated loan or a dollar loan if the original loan is a Swiss franc loan or a Swiss franc-denominated loan.
Can I switch to dollar?
This option may be of particular interest to those looking to convert their foreign currency loans into dollar loans to make repayment more predictable. Foreign currency debtors are also free to convert to new dollar loans that comply with the new regulations, but they can even stay in their own currency or even switch from franc loans to euros.
The question is, is it worth it for foreign currency creditors?
The interest rates on foreign currency and dollar loans do not differ significantly, so creditors have to face practically the same repayment even after the change. Risks, on the other hand, change as you do not have to worry about the weakening of the dollar.
Instead, you may be afraid of changing interest rates, whose risk is much higher than dollar loans, as the benchmark may easily move up from its historical low. The only way to protect against this is to choose a long-term fixed-rate loan that changes interest rates over a period of 3, 5 or even 10 years, as the business environment changes.
However, with dollar conversion, you have to give foreign currency creditors several options. On the one hand, they will no longer be able to benefit from favorable exchange rate fluctuations and thus be excluded from any further foreign currency loan bailouts. In recent days, the European Court of Justice has ruled on the unfairness of the exchange rate gap used to repay foreign currency loans, which may give new debt to hope families, though it is estimated to be a few hundred to thousands of dollars a month.
In conclusion , it’s a good idea to check with your branch if you have an old type of loan. In the case of dollar loans, make sure to switch if you find more favorable terms. However, in the case of foreign currency loans, the issue is more delicate and requires careful consideration. We could get rid of the risk of further dollar depreciation for free, but we would also lose the potential benefits. The events of the coming months may help you make the decision.