It is basically possible to take out a loan despite debts. This can be taken up both for a rescheduling and in the form of an additional loan.
Debt that does not have fixed repayment obligations, such as the current account credit overdraft, does not fundamentally affect additional borrowing because it is not included in the budget. The account may not be overdrawn beyond the amount granted, as such conduct is deemed to be bad business and is usually identifiable by the bank statements to be submitted with the loan application.
For every borrowing in spite of debts, the borrowers make sure that they can pay both the previous and the new obligations on time. This is especially true in cases where the lender does not receive complete information about existing liabilities.
The bank loan despite debts
Without any difficulty, a bank loan can be taken on debts in a private environment, as these are not known to the private credit. If bank customers are already repaying a loan, the bank checks in its budget statement whether they can raise the new loan installment in addition to the monthly installments. If that is the case, there is nothing to prevent additional lending.
In the budgetary accounts, banks use different methods. The most significant differences relate to the inclusion or inclusion of ancillary income. Anyone who achieves such a loan ideally chooses a financial institution, despite debts, which involves additional income in the credit check. Whether this is the case can be seen in most banks on the basis of the documents to be submitted or the published procurement rules.
In principle, a Swiss loan without private credit is also eligible for existing loans. In such a case, the solvency request for German credit protection is omitted, so that the bank is not aware of existing liabilities. Thus, the debt-free loan is accessible despite debt.
In spite of debts, a joint loan application from a domestic bank with another applicant turns out to be cheaper than the debt-free loan from Switzerland. This refers to a regular income, his credit report contains no negative feature and he has ideally no own loan to pay off. In principle, anyone can act as a co-borrower, but individual financial institutions require the same address of both loan clients.
Alternatives to bank credit despite debt
In spite of debts, installment payments in the trade can easily be accepted as earmarked loans, especially as a trader in the private credit inquiry receives no information about existing liabilities of his customer. Thus there is a high risk of over-indebtedness if the buyer does not independently check whether he can actually service the installment payments received punctually.
Dealer loans are usually given at low interest rates or even without interest. Nevertheless, buying in a business where direct financing is possible may entail unnecessarily high expenses. Not infrequently competitors offer no financing, but the same goods at much lower prices.
As an unrestricted loan, the existing personal liability is organized credit, which is handled through an online brokerage platform. The conditions for lending are lower there than for domestic banks.
While the platform operator and the legally cooperating bank with a full banking license are informed of the existing debt, the applicant is in principle free to disclose it to potential private lenders or not. Experience has shown that disclosure is beneficial as many private lenders follow social criteria rather than traditional credit ratings. For this reason, the perceived urgency of a credit request usually leads to its rapid drawing. Also important is the detailed description of the purpose of use, as a significant part of the private lenders registered on the platform also use it for their award decisions.
The rescheduling of existing loan liabilities in connection with a new borrowing
As part of a rescheduling, the borrower combines the existing liabilities and the top-up amount into a new loan. Loan debt leads to savings when the interest savings are higher than any prepayment fees that may have to be paid.
Usually, commercial banks require debt consolidation to include all existing loans. Exceptions are usually possible for loans with very favorable interest rates such as car loans and dealer financing. A real estate loan is almost always excluded from rescheduling, especially as its early repayment is often excluded.
In order to ensure that the customer actually uses the loan to settle existing debts despite debts, the bank does not transfer the amount to its bank account. It balances out the current loan accounts instead. The borrower’s giro account will only receive the amount of credit and the top-up amount determined to balance the disposition credit. If individual previous lenders, which is often the case with credit card issuers, do not accept third-party payments, the lender also transfers the corresponding partial amount to their customer’s bank account.
In the case of a loan despite debts in the context of a rescheduling, the bank customer chooses the longest possible term so that he does not have to use his own repayment credit to pay the loan installment. Also favorable is an agreement in the loan agreement, which allows an occasional break in the rate. This is possible once a year or every two years for part of the loan agreements.