Are you now thinking about what makes more sense to repay, to extend an additional loan or the old loan during the term?

Below we present the three possible options to cover the current financing needs. Each variant can bring you advantages, in some cases, such as with credit without credit bureau, the possibilities are limited.

Increase credit during the term – easy credit increase

Increase credit during the term - easy credit increase

Increasing credit during the term is not something that all credit institutions automatically offer in their credit terms. Depending on the provider, the credit increase can also be limited to certain financial products. Regular credit institutions that do not allow an increase in credit mostly offer the debt rescheduling loan as an alternative to the financing requirement. Borrowers have an easy game of low-interest loan increases with the credit line.

Framework loans correspond to a mixture of short-term credit (overdraft facility) and long-term installment loan. Its purpose is to finance loan needs that are difficult to calculate in the medium term and flexibly. They are almost as low-interest as a current installment loan. Framework loans prove flexibility by paying out the loan amount in partial amounts or the total amount within one booking day.

Interest is only payable for sums already called up. You will be automatically drawn from the salary account. The loan repayment can be made in any partial amount, in one sum or at different times. In order to increase the loan during the term, provided that the creditworthiness is sufficient, it only needs to be briefly discussed with the clerk.

Debt restructuring and top-up – similarities and differences

Debt restructuring and top-up - similarities and differences

Debt restructuring and topping up are suitable to meet additional financing needs. In the case of debt restructuring, the goal can be achieved by a new loan replacing the old loan. By realizing repayments already made, an adjusted higher loan amount, the actual loan requirement is available. The debt rescheduling would be advantageous if the refinancing is associated with an interest advantage.

If the credit rating has developed positively since the borrowing or a cheaper loan was approved, the debt restructuring proves to be a debt relief. In the case of a classic loan increase, the loan conditions usually do not change. The rate and interest rate remain the same until the original sum is reached. Increasing the loan over the original amount during the term does not change the interest rate.

In this case, however, the monthly payment in installments would increase. In the overall view of all offers, however, it would be rather uncommon to increase the old loan beyond the original loan volume. Most of the time it says in the credit terms increase to the old loan amount or rescheduling. A special case would be the loan without credit bureau from the Sigma credit bank in Liechtenstein.

Top up credit without credit bureau

Top up credit without credit bureau

In principle, the credit increase is possible without credit bureau. Three basic requirements must be met. First of all, the old loan (3,500 USD) must be paid off to 1,500 USD or, for 5,000 USD, a tobacco-free loan to 2,000 USD. The bank also requires a positive impression of the repayment behavior to date to top up the loan. The economic situation must not have worsened compared to the first application.

The loan would be increased again to the old loan amount, but as a new loan without credit bureau, which means that the old loan conditions would be exchanged for the current ones. The new loan would offset the old loan and transfer the difference. Nevertheless, the bank refuses to use the term debt restructuring. According to the conditions, no two credit bureau-free loans may be granted to a borrower at the same time – hence an increase.

Alternative to credit increase – additional credit despite current credit

Alternative to credit increase - additional credit despite current credit

Both topping up the loan and rescheduling the existing installment loan can be an expensive pleasure. This is the case if there is credit insurance for the old loan. In both cases, insurance coverage would be completely lost for the credit insurance already paid. However, contributions paid too much will not be refunded. The existing RSV would also not be transferable to the top-up loan.

About 10 percent of the transfer fee, or 750 USD transfer fee per borrower, would be lost. The best alternative in this case would be to take out an additional installment loan instead of increasing the existing loan during the term. In most cases, the loan provider only allows one installment loan per borrower. The new additional loan would have to be “leveraged”.

Easy to find, quickly applied for and paid out, that would be a low-interest installment loan via a free loan comparison. Borrowers who always meet their current payment obligations on time do not usually have to fear that the additional loan will be approved. As long as payment obligations and income are in reasonable relation to each other, which credit bureau is “clean”, credit can be granted.

Increase personal credit during the term – Best Bank

Increase personal credit during the term - Best Bank

Increasing credit during the term is not only possible with bank loans. For example, Best Bank, as the market leader for private credit brokerage, expressly grants the possibility. Nevertheless, Best Bank advises on debt rescheduling from experience. While private investors shy away from a credit increase, debt restructuring has a better chance of approval.

In this case, debt restructuring does not have any disadvantages. Because, even with a credit increase, the loan conditions (loan interest) would definitely change. Experience shows that increasing credit during the term is more expensive and takes longer than rescheduling via the portal.

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