The top-up loan:
The term “top-up loan” refers to the increase of the already running loan, ie a loan by a certain amount. For almost any current loan, it is now possible to have it added at a later date to increase (increase) a certain amount. Most providers inform the borrowers about the so-called top-up loan already at the conclusion of the main credit. In principle, the possibility to make use of this later increase is possible at any time.
The top-up loan:
- How does a credit increase work?
- Can a loan be made?
- When does a loan increase make sense?
- Which approach is appropriate?
- Advantages of the credit increase
- What is needed?
In most cases, you are worried about this type of credit increase only when the current situation requires it . Mostly a financial problem is the reason why such a loan is applied for at the bank. For example, the construction of a house is ultimately much more expensive than it was at the beginning of the construction period.
How does a credit increase work?
Of course, the credit can only be increased at the company, where you have also completed the initial loan. In almost all cases, the following situation occurs: Unexpected monetary problems still occur during the originally agreed term of the loan. That’s why more money is needed than was previously set by the bank. Although in this situation most of the existing loan was only partially repaid, it is still possible to increase it again.
Every qualified bank employee is guaranteed to have the right solution to their financial problems. It also gives you the right advice on how to best increase a current loan. Any standard type of loan can easily be adjusted to a desired loan amount . Anyone who chooses to raise their loan should consider before this step, whether you can afford a higher loan at all. Before the increase of a credit again the creditworthiness, thus the credit worthiness, of the consumer is checked.
Can a loan be made?
Once this important criterion has been clarified, nothing more stands in the way of increasing the starting amount. A comparison of revenues and expenditures will determine whether the debtor, after deduction of all costs, can afford a higher credit and thus in most cases a higher credit and / or a longer loan term . Only if the funds are sufficient, the credit can be easily increased. A significant advantage of the top-up loan is definitely the cost. Basically, it can be said that it is always better to raise an existing loan than to take out a new loan.
Also, the overview of debts is so clear and simple, both for the bank, as well as for the borrower. Also, the interest and thus the associated repayment rate for this loan are certainly cheaper than other variants .
Another plus is the fact that the process of topping up is much faster than applying for additional credit. In order to be able to counteract a later increase in the credit already in advance, each borrower should schedule a little more buffer in the credit planning. For unexpected additional costs or changed living conditions it comes faster than you might think at the beginning.
When does a loan increase make sense?
The life situation changes very fast and you need more money. Now it is necessary to increase the existing credit. You can increase the loan amount to the amount you still need . Or you take the original sum of the existing contract.
Good to know:
There are multiple possibilities. A new loan can be taken, with cheaper interest rates. In this case, it is advisable to replace the former loan with the new, that is, to repatriate. This often results in a lower rate, with lower interest rates, but a higher loan amount and thus more free financial scope for his wishes and needs.
Which approach is appropriate?
To increase your credit, you should first go to the bank where the loan already exists . This then makes a new offer.
Of course you can also get an offer from other banks. The course of the loan offer and the contract preparation differs for the banks. In case of an increase, many banks have processing fees. These must be anchored in the new loan agreement. It’s worth taking a look.
If you replace an existing contract with a new loan, no fees may be incurred. Only for the topping fees may be charged.
In order to apply for a credit increase, of course, your own economic situation must allow this. That’s why you have to ask yourself the questions?
What is my monthly income and what are your monthly expenses? Do I still have enough air when my income goes down or spending increases? A financial buffer should always be included in this bill.
There are always certain situations in life where the monthly income can go down. If you can answer this question with a clear “yes”, you should consider raising and contacting the bank.
Advantages of the credit increase
A credit increase is always the cheapest and most manageable form of an increase . Taking a second loan over the desired amount makes it more difficult to keep control of these two loans.
The overall rate of a loan on an increased installment loan or an annuity loan is always lower than a second loan.
With the annuity loan, the installment amount of the loan remains the same over the entire term. With each paid installment , the share of the repayment increases and the share of the interest is reduced.
With a installment loan, the amount of the repayment installment varies. The term is usually longer than an annuity loan.
What is needed?
Employees and employees need the last 2-3 salary or salary statements to top up the loan. Account statements are also often required by banks and self-disclosure . This makes the bank a household bill.
Pensioners need the pension notice. Due to the age risk for retirees, many banks have an age limit . This varies from bank to bank.
A legitimation in the form of a valid identity card or passport . The passport you need the resident registration certificate, because no address is entered in the passport.
Freelancers and the self-employed are classified separately because their income is not consistent and secure. They prove their monthly income through proof of income, such as, loss, – profit and loss statements, or bank statements or surplus accounts.
Even with a credit increase, the bank likes to add a second borrower . The so-called guarantor. He intervenes if the borrower can not redeem the installments.