Top up credit – that's how it works

The essentials in brief:

 If you have a loan and need extra money, it can be a good idea to top up the loan instead of taking out a new loan from another bank. 

Topping up a loan is usually faster and less complicated than applying for a new loan from another bank.

Alternatives to increasing the debt are debt restructuring or taking out a new loan. Whatever you decide, it pays to compare loan offers.  

The money is not enough! Not so long ago you applied for a loan, e.g. B. to renovate your own home, and now you realize that everything costs more than you thought. That's how it is for many. The fact that a loan has to be increased is more common than you think. There are usually benefits to increasing a loan as well. Nevertheless, one should know the alternatives. 

Increase the benefits of the loan

If you top up an existing loan, you save yourself the effort and time of applying to a new bank and disclosing all the relevant information there again. You know the bank, the bank knows you, so you're not starting from scratch. Specifically, this means:  

You no longer need to submit all of the documents, because the available documents will be used to process your request.

The process is usually less complicated.

There is no new contact person

It stays with one loan and one monthly payment: This way you can easily keep track of your financial situation

But one thing is almost never possible: increase credit at the same rate. Then at least the runtime would have to be significantly increased.

Increase credit: it's that easy

First of all, it is important that you consider what additional amount you need. Can you afford the increased credit? If yes, contact your bank. At a branch bank, it is best to arrange a personal appointment with your contact person.

You can also easily apply for an increase in the loan from online banks. Go to the bank's website, which usually has specific steps to top up your loan. If you have a specific contact person at your online bank, you can contact them directly.  

The bank will then look at the details again, i.e. how your situation has changed since the previous loan was granted. If you already got the most out of it back then and nothing has changed since then – e.g. B. no higher disposable income - it will of course be difficult to convince the bank to increase the loan. (But that also applies to a new lender .) The bureaucratic effort is limited because the bank already has your personal data.    

The requirements for increasing a loan 

Every time you grant a loan, you have to meet certain requirements, which of course also applies to increasing the loan amount.  

 In any case, the bank checks your creditworthiness – and thus your creditworthiness . It uses various sources of information, above all the Schufa. Your creditworthiness is based, among other things, on your previous payment history as well as your income and property situation. If the credit rating is high enough, the increase in the loan is approved.

Your regular income is also important. For this purpose, the bank requires, for example, the last salary statements. 

Is there any collateral you can offer the bank? If so, it increases the chance of getting a higher loan. Collateral can e.g. B. Savings books, home savings contracts , life insurance, real estate and bonds. A guarantor is also considered security.  

When and how often you can increase a loan 

There are no fixed dates for increasing loans. Nevertheless, if you have just applied for a loan and want to increase the loan amount a few weeks later because you need money again, it will probably not work. For the bank, this is a sign that you don't have your finances under control. Therefore, most banks have a lock-up period of about four to six months before granting a larger loan amount.      

In theory, there is no limit to how many times you can increase the loan amount . First of all, the bank should be more happy if you want to process new financing with them again. This shows loyalty and ultimately means more revenue for the bank. In practice, however, the bank will only agree to an increase in the credit line once or at most twice. After all, every increase requires a repeated check of your financial possibilities. In addition, the bank will eventually ask itself whether the borrower really has an overview of his income and expenses.   

Increase two alternatives to credit

Take out a second loan: Of course, you can also take out another loan from another bank to cover your financial needs. Your creditworthiness will be checked again. However, this can mean that your SCHUFA score will be reduced. Because SCHUFA rates it negatively if borrowers take out two loans from different banks in quick succession.

Reschedule the loan: Alternatively, you can reschedule the existing loan and increase it by the missing amount. Debt restructuring is often worthwhile if you have other loans – e.g. B. an overdraft facility - have to run. This puts all liabilities on a single loan and only pays one installment to a bank. The good thing about it: Converting several loans into one usually has a positive effect on your SCHUFA score, because it shows that you want to organize your finances. However, it is important that you observe all legal conditions and fees for terminating the loan. An early redemptionAn existing loan can be expensive - because of the so-called prepayment penalty. Unless you have agreed on a free special repayment.  

Tips for increasing credit

A household bill can help you get a better overview of your income and expenses. In this way, you can also determine what additional loan amount you can actually afford. A household bill is also a good basis for discussions with the bank and is often requested.

 Prepare yourself well for the interview with the bank: if you clearly state your reasons for increasing the loan and e.g. For example, if you can prove additional collateral, your chances of success increase.

It doesn't matter whether you increase the loan or prefer debt restructuring : Play with open cards - the previous or a new bank will find out about your financial situation anyway.

Even if you want to top up a current loan, you should first compare your bank's conditions with those of other banks and intermediaries ( annual percentage rate, fees, term, etc. ). It is not uncommon for these to have better conditions. If these are only slightly cheaper, the increase is often the better option - for the reasons mentioned above. You should only know other loan offers and conditions. This also allows you to make an informed decision.