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Opportunities to reclaim early repayment penalties from 2022
The current decision of the Federal Court of Justice (BGH) has far-reaching consequences for borrowers who have paid prepayment penalties to banks. According to this, banks are not allowed to demand prepayment penalties if the corresponding contractual clauses are not formulated clearly and understandably. This decision particularly affects borrowers of real estate loans who have paid such compensation to a cooperative bank since 2022. In many cases, prepayment penalties already paid can be reclaimed.
According to media reports, banks such as Volksbanken, Raiffeisenbanken, Sparkassen and Commerzbank are apparently using clauses that have been criticized by the Federal Court of Justice. Our law firm expects that there could be a wave of lawsuits against banks in the near future and therefore recommends having your loan agreements checked immediately - even retrospectively. Incorrect clauses can mean a significant financial relief for consumers.
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Taking out a loan for a property or other large purchase usually involves a long-term financial burden. However, life circumstances often change unexpectedly and borrowers have the opportunity to pay off their loan early. This may be due to separation, illness or an unexpected financial change.
Unfortunately, many borrowers are then faced with a prepayment penalty, which is demanded by the bank if the loan is terminated early. This compensation is intended to compensate the bank for the lost interest income that it no longer receives due to the early repayment. Especially in the case of real estate loans, these compensations can reach high sums, often amounting to several thousand euros.
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What you should know about prepayment penalties and loans
If you are thinking about repaying your loan early, it is important to understand how prepayment penalties are calculated. Banks use methods such as the "active-active" method or the "active-passive" method to calculate their financial losses from early repayment of the loan.
The Active-Active Method
With this method, the bank assumes that it can immediately lend the repaid loan to another borrower. The loss only occurs if the interest rates have been reduced since the contract was signed. The borrower must compensate for this lost interest.
The active-passive method
In contrast, the asset-liability method assumes that the repaid funds are invested in the capital market. The return on this investment is compared with the interest that the bank would have received under the original agreement. The difference between the return and the lost interest then gives the prepayment penalty.
Legal strategies to circumvent the prepayment penalty
Despite the challenges, there are legal options to avoid or contest the early repayment penalty:
Variable interest rate: With a variable interest rate, you are not entitled to a prepayment penalty because you can terminate the loan with 3 months' notice.
Termination of the loan by the bank: If the loan is terminated by the bank and not by you, you do not have to pay any early repayment penalty. This also applies if the loan is terminated due to non-payment.
Special right of termination (§ 489 BGB): After a 10-year term, consumers can terminate their loan agreement with 6 months' notice without any early repayment penalty. This can be particularly advantageous in the case of debt restructuring or changed life circumstances.
Incorrect cancellation policy: If the cancellation instructions in the contract were incorrect, you may still be able to cancel the contract and thus avoid the early repayment penalty.
Seek legal advice
Avoiding or reducing prepayment penalties requires careful legal review and planning. Our specialized team offers you:
Initial consultation: We evaluate your claims and advise you on the best legal options to avoid early repayment penalties.
Legal representation: Whether out of court or in court – we consistently enforce your rights to achieve the best possible outcome.
Act now: Protect your finances
It is important to act now as legal deadlines (limitation periods) apply to the recovery of early repayment penalties. These begin on December 31 of each yearin which the payment was made. Contact us today to protect your financial interests and assert any potential claims.
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We offer you professional and comprehensive initial advice in the area of banking and capital market law. Take advantage of your opportunity and avoid mistakes.
