Top up credit – what to watch out for?

People who have already taken out a loan from a bank to finance a certain matter can quickly find themselves in the situation that the amount of the loan is insufficient for the expenditure incurred. Your own house construction can be used as a model here.

This is because costs that arise after the fact that were not planned in the beginning are particularly frequent. However, the resulting bills have to be paid in order to be able to continue building the house. This is a prime example because the future owner now has no real alternative but to make the payment with further borrowed money.

Discuss the options with the bank

Discuss the options with the bank

Of course, a personal conversation with a responsible bank employee is essential if a loan is to be increased. The borrower should be able to explain plausibly why the amount has to be increased, but that nothing has changed in the other requirements. The respective financial institution already has all the important documents of the borrower and can now check them again. After an initial check, the check is successful and the conditions of the loan are determined.

This includes the interest to be paid, the time of payment and the amount of the installments. It is important that the installments can still be paid by the borrower despite the now higher loan amount. This should consider well in advance what amount he is able to pay off each month and what amount the absolute upper limit is.

The most important factor in increasing the loan amount: solvency

The most important factor in increasing the loan amount: solvency

It has already been mentioned that the increase in the loan amount will only be approved if the examination of the borrower’s documents has been successful. Above all, the solvency of this person plays an important role.

Of course, the higher amount will only be approved if the borrower is still able to make the higher installment payments. The most important influence on the creditworthiness has the income of the respective person. But other financial obligations, such as rent payments and insurance, are also relevant for the credit rating.

It would be very advantageous, for example, if the borrower now had better financial options than when applying for the original loan. A second income, income from rent payments or the end of other financial obligations, such as maintenance payments, can significantly increase the solvency of the borrower. Of course, the bank needs sound evidence and evidence to support these changes. A private individual can also provide a guarantee in order to offer the bank security.

Better take a second loan?

Better take a second loan?

As already mentioned, the borrower can also consider taking out a second loan. Whether the increase in the loan amount or the conclusion of another loan is advantageous is determined by the respective conditions. If the borrower is granted a second loan, the interest payments of the two alternatives must be compared.

It is definitely recommended to use the calculator. A good offer may be presented to the borrower by a second credit institution in order to successfully poach it from the competitor. However, the borrower should under no circumstances forego advice and comparisons, which can now also be done conveniently online.

Top up your existing loan: you should definitely take this into account

Top up your existing loan: you should definitely take this into account

As now shown, some aspects need to be considered if the loan amount is to be increased. For the sake of clarity, these should now be briefly and briefly presented again.

  • The first thing to do is always contact the bank where the loan was taken out
  • Subsequently, the existing problem that the amount paid out is not adequately presented must be presented here
  • The following credit check will be even more precise than the first
  • For the examination, all important documents must be in the required form and up to date
  • The borrower should carefully check whether he can make the new installment and interest payments
  • Sign nothing immediately! If in doubt, you should always sleep at least one night on it
  • If the borrower comes to the conclusion that the amounts are too high for him, a look at the competing companies is worthwhile
  • If the interest on a second loan is cheaper, this option should be chosen

Do you have any tips and experiences about how you felt when you increased your loan? If so, please share your experience and write a comment here: