If it turns out that the amount of credit you once took is insufficient, there are two ways to solve this problem. The first option is to take another loan. To increase the existing credit is the second option. Boosting an existing loan is not unusual among the banks. The customer and his financial situation are known to the bank.
What to do if you have a longer loan?
In this case, it depends on the interest rate of the current loan. If the interest rate is above the current interest rate level, topping up the loan is not a good idea.
Alternatively, there is the possibility to cancel the old loan agreement and conclude a new contract. The new contract includes the old receivables and the newly required amount. This pays off if the early repayment penalty is offset by the interest rate advantage.
An increase in a committed interest rate can be complicated. Experience shows that this is worthwhile if the interest rate is still favorable after expiry of the fixed interest period.
A second option is to let the loan run and to take out a new loan for the necessary new capital requirement.
Extend an existing loan
Whether it is possible to increase the loan in the desired amount, decides the bank. To clarify this, in most cases a phone call with the service hotline is sufficient. In this can be quickly clarified in what amount of the existing contract is to increase.
Also, changes in the amount of the rate and the modification of the term of the contract can clarify by phone. Some banks now offer the option to apply for an increase in the loan online.
Take a second loan
Taking a look at the terms and conditions of other banks may prove useful. If another lending institution offers significantly lower interest rates, it may be reasonable to apply for the required amount there. However, banks are not necessarily thrilled when a second loan is made to another bank. For this reason, it may be that the bank offers a takeover of the second loan on its own.
A good move may be to submit the low-priced offer to the competition of your own bank. In this way, you may be able to negotiate a more favorable interest rate for topping up.
Does a credit check take place?
No matter how the decision has been made, the banks always conduct a credit check. If the new installments are acceptable to the customer, the bank will agree to a higher loan amount. The most important question is whether the income is sufficient. The advantage of the previous bank is that it has insight in this regard. Alternatively, to increase the Bank’s sense of security, a second borrower may be positive.
Activities in advance
A good idea is to make your own calculation in advance. Thus, it can be seen whether an additional monthly installment or an increased monthly rate can be financially supported. With a comparison of the inputs and expenses, you can determine how much free liquidation is available on a monthly basis.
Checking one’s own creditworthiness beforehand can be advantageous. With the credit bureau there is the possibility to obtain a free self-assessment.
With an increase of an existing loan, the banks agree in most cases. The condition is that the payment of the installments is compatible with the income. If the competition offers more favorable interest rates, even a fee-based replacement of the loan can pay off financially.
Another way to obtain the required capital is to take a second loan. The presentation of a competing offer with a cheaper interest rate can pay off.
5 tips to increase your credit
1. Compare loan offers
Regardless of whether an old loan is to be increased or a new loan taken up, it is very important to compare the loan offers. It is advisable to use a comparison portal on the Internet for this, because there are numerous offers from low-priced and low-interest direct banks. As a rule, they have no network at all and offer their services exclusively online.
Of course you can also contact your local bank or the bank where the previous loan exists. Here it is then simply checked whether you meet the conditions for a credit increase. If this is the case, the old loan can be combined with the new loan.
2. Check credit requirements
Before seriously considering a loan increase, you should consider carefully whether your personal situation allows it, because you must pay higher monthly repayments if you have raised more money. The most important prerequisites for a credit increase are a sufficiently high and sufficiently secure income as well as an impeccable credit rating.
Similar to an initial application, the credit institutes also obtain a credit bureau statement in the event of a credit increase. There should be no negative entries here, because then it will be very difficult or even impossible to take out a new loan. Foreign or private lenders waive a credit bureau.
3. Bank and savings bank loans
In many cases, the path of people who want to top up a loan leads to a bank or savings bank in their vicinity. There, a credit application form must be completed. In addition, the bank adviser needs a current proof of income and other documents that can prove the solvency of the customer. A decision on the loan application is usually made within a few days.
Many banks are offering their clients the option of applying for an online loan application, as an alternative to filing an application in the branch. For this purpose, there are prepared loan forms on the website of the respective bank. In the use of the loan, the customer is usually free. Exceptions are car, real estate or other earmarked loans.
4. Payday loan
A good alternative to a bank loan can be a personal loan. There are several possibilities for this. Either there is a chance to get a loan from a friend, friend or relative or the loan comes from a stranger. Lending from private to private, which has created numerous loan platforms on the Internet in recent years.
If you are looking for a loan, you can register for free there. The same applies to people who want to offer a loan. payday loan have the advantage that there are no strict requirements as with a bank loan. However, it also applies here that a certain degree of creditworthiness must be available.
5. Foreign loans
Many people are interested in foreign loans. The most important prerequisite for this is a secure income. An insight into the credit bureau does not take place. Taking out a foreign loan can be a great way to top up a loan. As a rule, amounts of money amounting to a maximum of 7500 euros are available.
All formalities for the application are regulated via the Internet. It is by no means necessary to travel directly to foreign countries. The payment of the money takes place by transfer to the current account or in cash. The loan must be repaid in installments.