Few consumers can claim to have no debt and therefore no credit. The credit business is at home in all areas of the population. Whether rich or poor, loans make a lot of things possible and can make a difference. However, borrowers often lose track of their liabilities. One loan has been taken out too much and the loan installment can no longer be paid. A loan despite debt is a sensitive business that should be approached with care.
The loan despite debt – the starting point
When the following situation arises, a customer has to pay for an expensive repair, the refrigerator has given up its ghost, or there are other expenses that cannot be paid from the current budget, then many consumers think about a loan despite debt. If the consumer acts prudently, he will use a budget to determine whether he can still afford a loan installment. He should put his income against all liabilities to do so, if there is financial scope left, this could be the rate for a new loan.
However, it would be better if the loan seeker merges his liabilities into a loan despite debt. In the best case scenario, this will result in savings that consumers will notice. The debt will not decrease, but he only has one creditor and thus a better overview of his finances. If all financial liabilities are to be paid to a money house, debt restructuring could be carried out without additional costs. If another bank comes into consideration and loans have to be redeemed by other banks or mail order companies, a prepayment penalty can be incurred.
To do this, the customer must know that the bank can offset such compensation if there are no special repayments noted in the loan agreement. The bank calculates interest on borrowing, which is usually calculated over the entire term of the loan. If a loan is now repaid prematurely, you will incur a financial loss, which is to be compensated with a prepayment penalty. The customer can avoid this in the future by having such free special repayments entered in their loan agreement. This also makes sense for the employee who can count on bonuses and additional payments from the employer each year.
To a new loan despite debt or rescheduling, the overdraft facility is one of the factors that often require a loan. The overdraft facility is provided by the bank if the customer has regular income. The amount of the overdraft facility is based on this income and can be up to three net monthly salaries. The overdraft facility is easy to apply for, a call to the bank is often sufficient and just as easy to use and there is a risk of overdraft facility.
Many customers use it like a second income, especially when the salary no longer covers the overdraft facility. Since the overdraft facility is expensive, it should only be used for a short time anyway. For example, if an urgent invoice has to be paid towards the end of the month, which is covered again after receipt of the salary. If a customer uses the overdraft facility beyond the granted credit line, he can slowly but surely get into the overdraft trap if nothing is left standing. The bank often terminates the overdraft facility if it is overdrawn again and again, and the customer then needs a loan, which the bank may not grant.
The loan despite debt – the loan options
Before banks grant credit, be it debt restructuring or a new loan agreement, they will check the customer’s creditworthiness. This includes the examination of income and the Credit Bureau query. The income must be high enough that it can be attached. For example: A single person must earn about 1,160 dollars net. Credit rates should always be set to match the client’s income and liabilities. Credit Bureau also plays a crucial role in a loan despite debt. If the customer has negative entries, for example because a reminder has not been taken seriously or an invoice has not been paid, he can have difficulties with another loan.
The house banks often refuse to approve another loan despite debt. The customer can then try it with a direct bank that does not have such strict credit rating requirements and does not see a Credit Bureau entry as closely. If he finds a lender, the invoice should also appear at the beginning of whether another loan installment can be paid. The negative entry in the Credit Bureau had its reasons and shows that there have been payment problems in the past.
If there is no conventional bank, a loan remains despite foreign debts. Credit Bureau does not matter there, the credit is also not entered, which practically results in an anonymous loan. However, the customer must also meet strict requirements here. The income must be above the garnishment exemption limit and the customer must have a permanent position that has existed for at least one year. The loan amount is limited at these banks. Only three loan amounts are offered, once 3,500 dollars, 5,000 dollars or 7,500 dollars. Depending on the creditworthiness of the customer, the loan of 7,500 dollars can then be approved.
The customer has to decide to what extent these loan amounts are sufficient. These loans have a high interest rate, similar to the overdraft facility, in the double-digit range around 11-12% depending on the credit rating.
If the Credit Bureau-free loan is out of the question because, for example, a larger loan amount is required, a surety can be named. The guarantor secures the loan with his income. If the borrower can no longer pay, the guarantor must continue to do so. The guarantor should be informed that a guarantee is a risk and especially the joint and several guarantee. The customer simply does not have to pay anymore, the bank does not have to carry out a complex reminder procedure, but can take the guarantor into recourse immediately. So it can happen that a guarantor has to pay off someone else’s debts.