Repayment extension

Repayment extension is the extension of the term of a loan. Example: A retailer has taken on credit for the purchase of a new shop fitting. The agreed repayment amounts are too high for him. He asks his bank to reduce the monthly repayment amounts to what he can afford. This extends the term of the loan. Extending the credit period inevitably increases the amount of interest to be paid. This makes the loan more expensive overall. In return, the amount of the repayment amounts will be smaller and therefore more affordable depending on the liquidity. In the case of mortgages, repayment extension is often provided for in advance.

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