Are you returning a loan and want to increase or extend it? Do you want to know how to proceed when you want to extend an ongoing credit? Not sure if you are obliged to renew the loan from the same lender from which you signed the contract the first time? Or maybe you wonder how you should behave with interests?
Increasing credit means making a new credit request
When borrowing a sum, an alternative solution must always be envisaged: it is always possible that something changes in one’s financial and family situation. For example, consider the case in which, during the repayment period of your loan, you suddenly need more money than budgeted: it would be necessary to increase the amount of credit in progress. In this case, it behaves as for a new loan request: you will have to fill in the online form again and then deliver the necessary documentation to the lender.
Choosing the right lender
Everyone is free, if he wants to increase the amount of his loan, to contact another credit institution or another bank, as well as to return to the institution where he had signed the previous contract. However, in the case of a credit extension it is always an extension of a loan in progress: consequently the original lender is always the first to contact.
New negotiation of interest in the increase of a credit
The fundamental question in the case of credit increase is to understand if the debtor, after having detected all the existing costs, is able to pay a higher installment. Since the increase or extension of the credit consists of a new loan request with the bank, it is possible to recalculate the interest for the overall credit and not only for the sum of the increase.
Increase or decrease in interest?
In most cases by increasing a credit we can achieve a reduction in the interest rate. But in extremely rare situations, an increase may also occur, in the case for example in which your financial situation has deteriorated or if your reliability has deteriorated due to, for example, a too rapid series of subsequent credit applications. Most Swiss banks will not make any loans unless at least six months have passed since the last one and this has not been paid in full. Too many credit applications worsen the debtor’s solvency.
Duration of the refund
In the event of an extension, the debtor can freely establish the period of time in which to repay the loan: it is thus possible to maintain the original duration, extend it, and possibly reduce it.
Get advice from us before making a credit extension request. We can make a non-binding request for you, which at first will not be registered in the Credit Information Center (Zek).