Debt restructuring bubble

Period in which a large number of borrowers terminate loans they have taken out and take out new loans on more favorable terms. This always happens when interest rates have fallen (period in which many borrowers replace old debt with new debt, generally to take advantage of lower interest rates). For banks and building societies, such mass debt rescheduling proves to be extraordinarily costly (in terms of personnel). They therefore try to counter this with high prepayment penalties and less favorable conditions for the lower-interest loan, such as above all shorter terms and thus higher repayment installments. In many Internet forums calling for debt restructuring, this is concealed. – See termination fee, bank fees, call, fixed term, account hopper, cost prepayment, prenumeration reservation, repayment, early, special payments, prepayment risk, interest rate bargain hunters, interim interest rate.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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