An installment loan is already running and you need additional money? Then you can top up your installment loan and finance it very quickly and easily. You can combine the increase with a new rate distribution and thus keep the monthly charge within limits. Raising or rescheduling a current loan is better than taking out new loans for a reason.
Increase installment credit with debt restructuring: more money, same rate
You can subsequently top up an ongoing installment loan with the same bank and pay a higher loan rate from now on. However, you should first consider the possibility of rescheduling – at your previous bank or another provider. With a new loan, you can replace the existing loan and generate an additional payment. In the best case, this is even possible without changes to the credit rate and term, because interest rates have fallen in recent years.
If you are currently repaying a loan with an effective interest rate of 8%, the monthly installment amounts to 607.05 with a remaining debt of USD 25,000 and the remaining repayment years. You can redeem this loan amount with a debt rescheduling and receive an additional USD 1,923.68 as an extra payout without changing the term and the amount of the installment. The only requirement is that the new loan can be financed 4% effectively – currently with a good credit rating, a realistic interest rate. If you also extend the term by one year, you will receive an extra payment of USD 8,020.08.
Top up credit instead of overdrafting and point of sale loans
It is better for your creditworthiness to use the smallest possible number of loans. Obtaining the liquidity you need from one or two installment loans will have little impact on your creditworthiness. However, a larger number of smaller loans, which also include installment payments in retail (so-called point of sale loans) are less good. These tend to lead to poorer scores for large credit agencies such as Credit bureau. Credit agencies assign your credit profile to that of comparison groups. Obviously, households with a large number of smaller loans are statistically more likely to experience payment difficulties.
Installment loans are also preferable to overdrafting the current account in this regard. If you overdraw your account within the framework agreed with the bank, high interest rates will be charged. If you also overdraw the credit line, the interest rates are even higher. In addition, a tolerated overdraft is a small negative feature because it indicates behavior that is not in accordance with the contract. You should top up installment credit before it becomes financially tight. If features such as tolerated overdrafts, return debits and standing orders that have not been redeemed are found, this can make credit negotiations more difficult.
Conclusion: The time for credit increases is favorable
You can top up an ongoing installment loan without changing the bank. As an alternative, the existing loan can be rescheduled into a new loan. As interest rates have dropped in recent years, an additional payout can often be made without changing the loan rate and term. With an extension of the term, this extra payout is even greater. An orderly financing with additional money requirements is in any case better than overdrafts and taking out several small loans e.g. B. on installment payments in retail. Many small loans have a greater impact on Credit bureau score values and credit ratings than a loan that suits you well.