Anyone who has a current payday loan and at the same time an additional capital requirement, has in principle the opportunity to increase his existing credit. A credit increase can be carried out by most banks under certain conditions, whereby, in particular, as a borrower should pay attention to numerous aspects. The following guidebook deals extensively with the subject of “credit increase” and includes not only important aspects but also numerous tips and tricks relating to settlement.

Anyone who has a current payday loan and at the same time an additional capital requirement, has in principle the opportunity to increase his existing credit. A credit increase can be carried out by most banks under certain conditions, whereby, in particular, as a borrower should pay attention to numerous aspects. The following guidebook deals extensively with the subject of “credit increase” and includes not only important aspects but also numerous tips and tricks relating to settlement.

Why is it worthwhile to increase a payday loan?

Why is it worthwhile to increase a loan?

For the borrower, a credit increase can be advantageous for different reasons. If additional capital is needed in addition to a current payday loan, it is often much easier to repay than a second loan. In addition, borrowers will be able to repay the borrowed capital at a much lower monthly cost. When repaying individual loan agreements, it is customary for each loan to be serviced at a minimum rate set by the bank (the minimum rate is calculated based on the maximum repayment term, which varies from bank to bank). This requirement becomes particularly problematic if the borrower has agreed on an above-average repayment installment for the first loan. When you increase your credit, the monthly repayment installment can be completely redefined so that the borrower is much more flexible compared to signing a new loan agreement. In addition, from a bank’s perspective, it is often much easier when an existing loan is increased (this is in line with internal bank rules and credit application programs). Since there is always a new credit agreement with the credit increase, the bank usually calculates a new interest rate. Depending on the interest level, the comparison of terms and conditions can also ” Increased Loan Agreement “Benefits for the Borrower.

These aspects must be considered around the credit increase

These aspects must be considered around the credit increase

With regard to a desired credit increase, borrowers must pay attention to numerous aspects. First of all, it is important to know that a credit increase can only be made if the borrower also has sufficient credit for the desired, higher loan amount. This depends above all on the repayment ability or servicing capacity. If it had already become “scarce” when applying for the original contract (monthly liquidity surplus was only just enough for the repayment rate demanded by the bank), the increase in the loan amount is usually not possible if the original loan amount is exceeded. In such a case, the outstanding balance can be adjusted to a maximum of the original amount. In the context of a credit increase, which is possible at any time only for a personal loan or a mortgage loan without debit interest, must also be taken to ensure that the borrower does not lose the rights granted by the bank. If, for example, the bank has granted it special special repayment rights or granted it a blank loan, then the borrower should unconditionally ensure that it retains these benefits in the course of the amended loan agreement.

The necessary steps to the desired credit increase

The necessary steps to the desired credit increase

If a current credit agreement is to be increased due to further capital requirements, then first of all a personal discussion with the respective credit institution must be sought. The possibilities of credit increases can only be discussed directly with the respective bank, and since it comes to the conclusion of a new loan agreement as part of the increase, the bank must also always agree to the desired change in the contract. First, it is customary that the bank will ask for the reason for the desired credit increase. As a borrower, you should explain as comprehensibly and authentically as possible why the desired credit increase should be carried out. In the next step, it is always about the feasibility or representability of the desired credit. Each bank has individual criteria for lending and demands different minimum rates in this respect. For example, within fixed maximum maturities of, say, 60, 72, or even 120 months, the creditworthiness of the borrower must allow for a installment amount that will result in full repayment even after the loan has been increased. If the bank’s required ability to service the capital is met and other criteria such as Private Credit information or collateralisation also fit – this is generally the case for the desired loan commitment. The bank then creates a new credit agreement and ensures that the increased loan amount is made available to the borrower as soon as possible.

Conclusion: In the case of a further capital requirement, borrowers basically have the opportunity to increase an existing loan. The increase in credit can have a positive effect on the borrower in different ways, for example, because he may get a new and potentially cheaper interest rate and pay back at a much lower rate than repayment of individual loan agreements. Anyone who wants to top up an existing loan agreement should first seek personal contact with the respective bank. The Bank checks whether sufficient debt servicing ability exists for the increased loan amount, the most important of which is that the borrower can safely bear the minimum rate required by the bank.