The loan approval is there, the money paid out – and then it turns out: The sum is not enough …
An increase in such a case, unfortunately, not so easy. We explain why that is. And we’ll give you tips that will help you avoid a bottleneck soon after a loan is paid out.
Less is more with credit not always
True to the motto “less is more”, many borrowers try to keep their lending as low as possible. After all, a small loan means low rates and, ultimately, lower interest costs. In principle, it is a good idea to take only as much credit as you actually need. Many consumers forget, however, that a few weeks (or even days) later gaps can open up again.
Then simply apply for an increase in the current loan, unfortunately, usually does not work. Because from the point of view of the banks it is a clear negative signal, if a borrower needs money again soon after the payment. For the institutions, this looks like the client in question has no control over their finances.
As a rule of thumb, you should not ask again in the first six months after paying a loan. Neither at the bank from which the current loan comes, nor at another bank.
Turnaround only after half a year
Only after these six months the tide turns in favor of the prospect. If he has paid his installments on time for half a year, the bank realizes that this is an honest and reliable repeater. Such customers are of course the favorite to the money houses, and therefore further (credit) business is now nothing in the way.
The challenge for many clients is to “survive” these first six months, even though new financial challenges have surfaced. You have to handle the upcoming expenses without taking another loan. For this to succeed, one should observe a basic rule when choosing the loan amount. It reads: Depending on the amount of financing, 10 to 20 percent additionally budget as a “buffer” – even if this additional amount is currently not needed at all.
The fact is: a slightly higher credit can usually be realized without any problems, but a subsequent increase in the first half year is not.
Therefore, it makes perfect sense to apply instead of a 5,000 euro loan, for example, 6,000 euros or instead of 10,000 euros rather 12,000 euros. Given low interest rates, the differences on the cost side are small. But there is the good feeling to be prepared for all eventualities. And as long as the “buffer” is not needed, it simply stays in the account.