It is not uncommon for consumers to need credit despite their credit. Domestic appliances are broken while the car is not paid off yet. A renewed borrowing is possible at any time, provided that the regular income for the payment of the monthly loan installment of all loans is sufficient. Due to the non-or only partial repayment obligation for the installment agreement on the credit card account and a discretionary credit, commercial banks do not include these credit options in their budget, so that an installment loan is available without restrictions, despite availing disposition credits. Likewise, consumers can not apply for a new loan despite the current credit and instead use their disposition credit or credit card account.
Do consumer consultants see borrowing as critical despite ongoing debt?
The fact that most consumer advisers are critical of a new loan despite the current credit is a summary of the usual recommendation from consumer associations. Rather, it says that households should not serve more than one consumer loan at the same time. The separation between acquisition loans and consumer loans corresponds only partially to the differentiation between investment loans and consumer loans in business administration. Although households do not earn money with new furniture, their longevity means that the loans they use are considered as acquisition loans. That another loan for a vehicle financing is inevitable despite the current loan, if an employee can only reach his workplace with his own car,
Special features of borrowing during current liabilities
Consumers who take out a loan despite the current loan must be careful to settle any applicable installments on time. In the case of bank loans, the new lender takes into account the repayment installments already payable in the revenue and expenditure account. Even if he does not ask in the loan application for existing obligations, he learns this as part of the private credit request. On the other hand, credit information provided to merchants does not contain any data on current liabilities, but only the relevant score value and information on possible negative entries. The financing of a second purchase by installment purchase is thus easier than a renewed borrowing. Thanks to the frequently offered zero-percent financing, it even represents the seemingly most favorable form of credit.
However, this is contrary to the fact that retailers offering a free installment often ask for higher selling prices than those who seek immediate payment. Customers increase their chances of getting another bank loan despite the current loan by choosing the longest possible term. This automatically leads to low monthly payments and thus to a positive result of the budget. If households need to service multiple loans at the same time, flexible repayment options for at least one loan make sense.
An increasing number of banks allow their customers to suspend their payment once a period of twelve to twenty-four months. Equally advantageous is the right to early repayments. This allows the quick repayment of the loans, if the household achieves surprising income. Especially in the case of a loan despite current credit, the inflexible loan with the lowest interest rate does not necessarily represent the overall more advantageous offer compared to slightly higher effective interest rates with flexible repayment possibilities.
The loan increase as a special case of renewed borrowing
If there is a need for additional credit during the repayment of a previously taken out loan, in many cases it is advisable to increase the current bank loan. The condition is that this is a non-earmarked loan and not a special loan such as a car loan. An advantage of increasing the current installment loan is that the lender can incorporate the previously punctual redemption payments into his decision. Nonetheless, consumers should refrain from renegotiating their loan because the increase in current liabilities is not necessarily linked to lower interest rates than a new loan.
Another way to take out a loan despite the loan in progress is to combine the old and the new loan. This is a debt restructuring in connection with a credit increase. This measure makes sense for the consumer if the new loan is associated with lower interest rates than the previous loan and, in addition, no or only low prepayment interest is payable. It is advisable to consider both a second loan independent of the first loan and the combination of a rebooking with an increase in the total loan amount for a credit comparison.