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Loan topping up - topping up existing credit or simply rescheduling?

Credit increase

After taking out a loan, additional financial resources are often necessary, for example, as there are unpredictable repair costs for the car. A loan increase is then a good idea . In some cases, it is also a good idea to consider debt restructuring . If you find that you get better conditions from a provider, you will save yourself a lot of money . However, there are a few points to consider if you want to top up a loan.

Loan topping up or rescheduling - which option is better?

If you want a loan, you should consider that there must be a time lag between the old loan and the new loan. The interval should be at least six months. In addition to predictability, banks also focus on reliability. If the customer asks for a loan again after a short time, banks ask themselves a few questions. Why does the borrower need money again when he has just received a loan . For the bank this can be an indication that there is a lack of financial solidarity. Anyone who only inquires after the six months about a loan increase has a better chance of getting approval.

Requirements for another loan

  • The income has to be right

If the income has not increased during the last credit request, a new credit check is due. After deducting all costs, the income must provide sufficient financial leeway. The monthly burden should not increase too much with an increased loan installment. The loan installment can then possibly be adjusted with an extended term. However, this makes the loan more expensive, but lowers the monthly burden.

  • The creditworthiness is checked

If a credit increase is desired, a new condition or credit request is carried out at the lending bank. For it to be successful, the credit rating should not have deteriorated. For the borrower, this means, in addition to sufficient income, a clean Schufa . The bills should always be paid on time, thereby avoiding amounts being seized from the account . Payments to a debt collection agency , which can be seen from the bank statements, also have a negative effect. Borrowers who have their finances under control and are “good debtors” have the best chance. Borrowers should know that a good credit rating means favorable terms for topping up loans.

New loan or rescheduling existing loan?

Instead of topping up a loan, borrowers have the option of taking out a completely new loan and rescheduling the old loan. Borrowers should focus on this process if the new loan brings better interest rates. This allows borrowers to save hundreds or thousands of euros. If you are still paying an old loan, you should find out about a cheaper interest rate. If the term is then adjusted to the financial situation, borrowers are often given a loan to top up a greater financial leeway every month. Before borrowers decide on a lender, a loan comparison should first be made. This allows the borrower to determine exactly how much savings will result from a loan increase.

This is how it works with the loan increase

Anyone who decides to reschedule or increase a loan must meet a few requirements. This will be the same process as the first borrowing.

The prerequisites for credit requirements are that the Schufa should not have any negative entries . The borrower can do this before the credit increase by requesting a self-assessment from Schufa . The income must be correspondingly high so that the monthly loan installments can be paid without any problems. Other loan liabilities should be manageable. Loan installments from previous loans should always have been paid on time.

With the credit comparison you will be shown some providers that can be easily compared. Nevertheless, you should apply for a loan increase at the bank at which the old loan is being serviced. If there are no good conditions here, the old loan can be replaced and a new loan can be applied for.

Topping up a loan is actually always possible. The increase should only take place in six months. Banks have set up a so-called blocking period to test the reliability of the borrower. In addition, the prepayment penalty should be considered when rescheduling. The banks charge themselves because they often have a loss of interest due to the rescheduling. If an increase is rejected, it is entirely possible that another bank will grant the loan. Even if another provider offers a better interest rate, rescheduling should be considered. When setting the loan rate, borrowers should remember to set aside a buffer for unforeseen expenses. The rate should always be based on income.

My name is Bechthold Christiane and I am passionate about writing specialist articles. In my long career, I have worked in the media, credit and medical sectors for 30 years. I convince with my reliability and quality of journalistic reports.