Increase Loan Amount or Choose Debt Rescheduling

1. Increase the credit on a credit price comparison

1. Increase the credit on a credit price comparison

If you are thinking about raising your already existing credit, a credit comparison is recommended. Although there is sometimes the opportunity to increase the existing loan, but not always this is the cheapest option. Meanwhile, the interest rates on loans are so low that it can be worthwhile to include other credit providers in the selection, and to convert the previous loan completely on a cheaper loan. Above all, such a rescheduling can be beneficial instead of a simple increase if the previous bank requires a loan completion fee. This could then be calculated and demanded not only on the increased amount, but possibly on the entire remaining debt (previous balance plus reimbursement).

A simple increase in a loan is often not possible, but it is a new loan agreement for the entire amount (old loan plus the amount increased) completed. As a result, the chosen way can be more expensive than a rescheduling of Altkredit plus increase to make. Although not all banks calculate the not uncontested closing fee for loans, but some banks still earn their money with it.

A comparison of loans is definitely recommended if new funding is needed, either an increase or a rescheduling of an existing loan eligible. For this purpose, it is important to pay attention to the prepayment penalty of the lending bank, before the previously taken loan is replaced by a new loan. Rescheduling can not always be worthwhile if special repayments and early repayment of the loan require compensation to the bank. The amount of the potential prepayment penalty was agreed in the credit agreement. Please also pay attention to our credit counseling guide. There you can find everything you need for special repayment and early repayment of loans.

The costs that may be incurred for the special repayment will be added to the new loan used for rescheduling. If fees are reimbursed for special repayments, they will amount to 0.5 percent if the remaining term of the loan is less than one year and 1.0 percent if the remaining term exceeds one year. If the interest rates for the loan increase due to the debt repayment lower than the already running credit, the inclusion of a new loan also makes sense financially.

Here’s how an online loan comparison works:

1. The loan calculator is called
2. The desired loan amount is entered
3. The term or desired rates are given
4. The offers of the different banks are examined

2. Renewed credit check on top up required

2. Renewed credit check on top up required

Once a credit check is made, and it is enough to top up the loan? Not at all. A new credit check will be required for the new enhanced loan agreement as it concludes a new loan agreement. Therefore, it is important to note whether something has changed since the last borrowing something in the economic and financial conditions to the negative. A note about a late payment in a installment loan or an installment purchase can be entered as a negative feature in the private credit information.

If this is the case, it may be that the conditions for the new loan are worse than before. In the worst case, it may even lead to a rejection of the desired increase by the bank.

In a rescheduling the credit check also often plays a role. The private credit now offers consumers the opportunity to obtain self-assessment. Once a year such self-assessment is free. If you are not sure which direction your credit rating has gone, you can use this. This self-inquiry is recommended by the private credit before a request to increase the credit is made.

3. Two loans two banks – parallel loans are possible!

3. Two loans two banks - parallel loans are possible!

Sometimes it is easier, and cheaper, to take out a second loan instead of raising an already existing loan. This is the case, for example, when another bank offers lower interest rates for a second loan, but a complete rescheduling would not be worthwhile. Of course, taking a second loan also depends on how the conditions look. In most cases, banks are less likely to conclude a second loan and then offer debt rescheduling on their own initiative. However, you do not have to get involved with that; it is crucial for you to make the most of the costs for you from the point of view of costing.

It is simpler to go to the previous bank to top up the loan than to take out a second loan. A credit check can be used to quickly calculate which of the two possible options, the increase in the loan, or the complete debt restructuring, is worthwhile. It may also be worthwhile to offer the already lending bank a lower-priced competing bid to negotiate a low interest rate on topping up the previous loan.

4. Increase your credit or choose debt rescheduling – the most important tips for doing so

4. Increase your credit or choose debt rescheduling - the most important tips for doing so

Previous Bank the first way

The bank on which the first loan runs should also be the first partner for the approach. Since the lending bank already has all the important documents, it can be that the credit increase can be completed faster than a rescheduling or a second loan with another bank. It is possible that the bank may actually have the best offer for a loan, and the increase in the loan would, of course, be cheaper than debt restructuring. In doing so, it is important for you: even at your existing lending bank, a new loan is being added to top up the loan. You can not avoid this fact. The loan installment is recalculated since the previous loan conditions can not simply be transferred one to one to the top-up.

Most importantly, prior to increasing your existing loan, or rescheduling your loan, you should consider whether it is feasible to pay higher rates within your current financial ability.

If there is a greater need for borrowing during the repayment period, it is important not to lose sight of the overall costs. Therefore, it is advisable when borrowing not to plan the maximum possible installment size too close, but rather to include upside for reserves. If there is still enough financial space for a loan, this does not mean that topping up is a good idea. The burden of installment payments should not put your own wallet in the corner.

No double payment of a processing fee!

If the loan amount is increased by the previous lender, you avoid double the processing fee for the loan. Such costs should be avoided as far as possible, and paid only in the event of rescheduling. In the meantime, however, there are more and more banks that grant loans without a processing fee.

Compare interest and costs of a new loan

The interest rates offered by cheaper competitors may well put the former bank under pressure. Sometimes you will be offered better conditions for the increase than initially foreseeable.

Upgrading the loan from the previous lender is often the simpler options than repurposing the old loan on a new, higher loan.

If interest rates at other banks are not significantly lower, rescheduling is an expense that is not financially sound. Switching providers is only recommended if the cost of the second loan is higher than the current loan.

Credit increase at some banks even online possible

Meanwhile, it is even possible for various institutions to increase the credit on the website of the bank or savings bank online. The request for the top-up will then be checked after it has been sent by the bank. The decision as to whether or not the loan can be increased is then communicated to you. However, the personal contact person in the bank is often the better choice, as it can react and act more easily to your personal situation. The effects of increasing the loan amount on the amount of installments and the term can be clarified better.

5. When it is more difficult to top up the loan

5. When it is more difficult to top up the loan

If interest rates are at a high level, raising the loan amount may not be easy. The financial burden would increase the increase, which may not be in good proportion to the benefit of the loan. If the request for the loan increase is rejected by the previous bank, or granted only on worse credit terms, a credit comparison of different providers with regard to a rescheduling may be the better choice.

By the way, borrowing a loan is no less complicated if the interest has been fixed. Here the increase is worthwhile only if the interest rate is still in a favorable framework even after expiry of the fixed interest period.

6. Conclusion

6. Conclusion

If a borrower’s income is enough to pay a higher installment, banks are very open to stocking up on an existing loan. If a competitor offers significantly lower interest rates, replacing the loan can be the financially better option. Even a fee-based replacement of a loan can be worthwhile if another bank offers far lower interest rates for a rescheduling. If this is not possible, or if this does not pay off interest, a second loan is also a possible option. In any case, it is recommended that cheaper offers from competitors be presented to the previous bank in order to negotiate the interest rate of a possible increase.t.

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