Credit increase: Extend existing credit or reschedule?

Additional financial resources are often required after borrowing, for example due to unpredictable repair costs for the car. A credit increase would then be appropriate for this. In some cases it is also a good idea to consider debt restructuring. If you find that you get better conditions from a provider, you save a lot of money. However, there are a few points to consider if you want to top up a loan.


Credit increase or debt restructuring – which variant is the better one?

Credit increase or debt restructuring - which variant is the better one?

If you want a loan, you should consider that there must be a time lag between the old loan and the new loan. The interval should be at least six months. In addition to predictability, banks also rely on reliability. If the customer asks for a loan again after a short time, banks ask themselves some questions. Why does the borrower need money again when he has just received a loan? For the bank, this can be an indication that financial solidarity is lacking. Anyone who inquires about a credit increase after the six months has a better chance of being approved.


Requirements for another loan

Requirements for another loan

  • The income must be right

If the income has not increased during the last credit request, the creditworthiness must be checked again. After deducting all costs, income must provide sufficient financial scope. The monthly charge should not increase too much with an increased credit rate. The credit rate can then possibly be adjusted with an extended term. This, however, makes the loan more expensive, but reduces the monthly charge.

  • The creditworthiness is checked

If a credit increase is desired, a new condition or credit request is made to the lending bank. In order for it to be successful, the credit rating should not have deteriorated. For the borrower, this means, in addition to the sufficient income, a clean Schufa, the bills should always be paid on time and thereby avoid that amounts are attached to the account. Payments to a collection agency, which can be seen from the account statements, also have a negative effect. Borrowers who have their finances under control and are a “good debtor” have the best chances. Borrowers should know that good creditworthiness is good terms when it comes to top up credit.


Debt new loan or existing loan?

Debt new loan or existing loan?

Instead of increasing a loan, borrowers have the option of taking out a completely new loan and rescheduling the old loan. Borrowers should focus on this process when the new loan brings better interest. This allows borrowers to save several hundred or thousands of euros. If you are still paying an old loan, you should find out about a cheaper interest rate. If the term is then adjusted to the financial situation, borrowers often get more money on a loan, which gives them greater financial scope every month. Before borrowers choose a lender, a loan comparison should be made first. This enables the borrower to determine exactly how much savings will result from increasing the loan.

Investment loan for small and new companies

At the end of 2017, over three million sole proprietorships were registered in the country. This is an absolute record in the history of the country. In addition, interest in running your own business is still huge – there are about 20,000 new companies on average every month! People are becoming more enterprising and more boldly quit their full-time job. Some professional careers start immediately from starting their own business.

However, it cannot be denied that running a business is a big challenge. We cannot expect regular payments here every month, but we have to rely on the solvency and timeliness of our contractors, with whom it is known that it is very different. However, we know that a company should not stand still, but constantly develop. We may have a head full of ideas, plans for great and reliable investments, but we will not be able to do anything without them.

Company development is usually expensive because it involves the purchase of new equipment or technologies, expanding the company space, implementing new activities, or even employing more employees. Fortunately, there are solutions that make investing in the business possible, even if it is small and exists on the market for a short time. An investment loan for small and new businesses should help.

Investment loan for new companies

Investment loan for new companies

Obtaining financing for companies operating on the market for a short time is difficult but possible. Unfortunately, banks are wary of less experienced entrepreneurs, which is also caused by the fact that the amount of outstanding bank loans is still growing. Therefore, before granting a positive decision, analysts will ask for a number of documents that will prove our credibility and ability to repay the commitment. We must remember first of all that each bank has its own procedures for analyzing loan applications and the type of documents required may be different.

Certainly, we must present those that confirm the existence of our company for a certain time, e.g. an entry in the business register. It may be necessary to confirm the income tax transfer for the months in which the company operates or the entrepreneur’s declaration that he did not have to transfer such tax due to too low income. Here we come to a very important moment of applying for an investment loan for small and new companies , i.e. the amount of income. Some entrepreneurs intentionally overstate the costs of doing business to avoid paying income tax. Remember, however, that it can take revenge quickly when applying for a loan. The bank will refuse to grant it if it finds that a company that has been showing only a loss for months does not deserve to be credible.

These documents, which may be useful to us, will also include certificates from the Social Insurance Institution and the Tax Office regarding non-arrears with contributions and taxes. The bank may also request a statement from the company account and a summary of the revenue and expense ledger and, optionally and depending on the industry in which we operate or the legal personality of our business, other documents.

Investment loan for small businesses

Investment loan for small businesses

There is no doubt that sole proprietorships constitute the largest percentage among all companies. Therefore, it would be unwise for banks to completely limit small entrepreneurs in obtaining credit products – they constitute a huge number of customers. Therefore, an investment loan for small businesses is also possible. In this case, we should start by preparing a good business plan. Our investment ideas should be attractive to the bank and prove that thanks to them the company will grow and be more solvent.

In addition to the business plan, you will need a complete set of financial documents for the company, bank statements and official certificates of timely payment of contributions . An investment loan for small companies will be difficult to obtain for those entities that delayed payment of installments of liabilities or failed to pay contributions and taxes. We will receive a detailed list of necessary documents in the bank before submitting the loan application. We usually have at least seven days to deliver them.

Overdraft card – what is it? What is an overdraft credit card?

All-natural and legal persons, the bank account, can optionally issue a loan in the form of overdrafts. The word “credit” is understandable even for a student today, but not everyone knows what it means for an overdraft account and why it cannot be called a credit.

Why open overdrafts?

Why open overdrafts?

If you need to close a gap in your sales revenue, it is possible not to give a bank loan with high-interest rates, but an overdraft. Suppose you have a bank account and use it not only for profit but also to deduct certain amounts from the customer. At some point, the required amount was not in the account and you have to transfer money as soon as possible.

The money in your account should be received in one day, but the customer cannot wait. In order to transfer money urgently to the customer, an overdraft card is used. This type of loan should not be confused with a loan or other financial transactions. When registering, a certain type of card is issued – overdraft credit.

Examples and specific numbers


To clarify the term ” overdraft card” what is it, here is a concrete example with numbers that you can use to understand how this type of loan works.

In the morning on the balance of the entrepreneur 10,000 USD. On that day, he goes to the bank and signs an agreement to open an overdraft limit of 1,000,000 USD. The entrepreneur gives the bank an order worth 100,000 USD on the paper backing.

The bank transfers the required money to the counterparty, including through an overdraft facility. It turns out that an overdraft company owes the bank 90,000 USD, but he still has 910,000 USD in limit that he can use if necessary. 

Suppose the next day in the account, the entrepreneur receives an amount of 120,000 (for example, the counterparty transferred the money). The overdraft is repaid and the free limit of funds that an entrepreneur can use is restored. It turns out that the next day the amount of 1,000,000 USD is available to him again. Here’s a hand-painted example that shows the essence of what an overdraft card is.

For what purposes can you spend the money limit issued by the bank?


Almost every bank has control over the cash it lends to a legal or natural person. If the borrower has his own business, overdrafts are used to pay bills, pay wages, taxes, advance payments for work, pay off loans and so on.

The bank will not allow you to use the cash limit if you forget to pay taxes or credits and a penalty has already been paid. If the borrower has such a case, the bank will not even allow him to purchase long-term assets through overdrafts.

Force majeure or overdraft


It is impossible to predict what will happen tomorrow, go business. If you haven’t calculated your options and the required amount of money has not been deposited into your bank account, this is not the worst, provided the bank credit limit has not been affected. Overdraft Card – What About Bank Debt?

If you still use this loan view and the money has not arrived in the bank before the date agreed in the agreement, payment can be made in cash to the bank. If the borrower has a second account that is constantly receiving money, you can transfer it to the account that has an overdraft. All transactions take place within one working day.

When signing the contract, you should be clear The date by which funds must be paid is indicated. This is usually the 30th day after the credit limit is opened. Some banks ask you to pay the debt by the 20th of each month regardless of when the limit was opened.

Under what conditions can I open an overdraft card?


Applying for a bank loan to a borrower Often you need to have a number of certificates and documents that confirm your solvency. If a large amount of money is needed, the guarantors can also ask. Fine Bank Visa Classic overdraft card provided without collateral property. It is sufficient if the bank shows your monthly cash receipts in the account. Based on the number of bar revolutions, it is decided how much to overdraw. It cannot be ruled out that the creditor will ask for guarantors. This can be the company’s general manager, the owner, the co-owner, and others related to your type of activity.

Who can be denied cash?

Overdraft card – what is it, is it given to everyone? It seems that if there is an account that regularly receives a certain amount of money, why should the bank refuse to issue an overdraft loan? It turns out that using an account is not enough, but you must have a positive credit history.

Before making a decision, the bank does not check an applicant, but the entire company. If he has the impression that it will be liquidated or generate no income in a few months, the loan will most likely be declined. In addition, at least three months of sales should be in the applicant’s bank account.

 Although the last time every bank called was right from your point of view. There are cases like this: An important customer applied for a bank overdraft facility that had recently opened an account with this bank but has had accounts with other financial organizations for many years.

The bank can apply to those organizations that generate customer money sales and make a decision about the credit limit based on this information. When considering an application, they are interested not only in the monthly amount credited to the account but also in how often the money is in circulation.

Term of the overdraft agreement


If the borrower’s result is positive, a contract is concluded for 180 days or longer. The account amount must be replenished every 30 days to cover the overdraft debt. Upon full repayment of the liabilities to the bank, the borrower has the right to terminate the contract. It is also allowed to make a new agreement after 180 days.

The interest for such an agreement was always lower than for a bank loan. The conditions for providing overdrafts are far more loyal, as interest in using funds only applies to the balance of the debt at the end of the working day. 

In the event of default, the bank has the right to get your money in the shortest possible time, and if you have such a situation, you are guaranteed a blacklist and poor creditworthiness. Current account credits are granted to a borrower and a bank in one currency.

Best loan


Overdraft card – what is it for the borrower: benefit or debt gap? Often, a person cannot plan their expenses, and when they get a salary, they start buying a lot of unnecessary things. At the last moment, he remembers that the most important thing was not acquired and that not all payments were made on time. You can ask relatives and friends for help, but not everyone has friends who can freely lend the required amount of money for several weeks.

Not everyone likes to borrow money. Many are based on the following principle: If you want someone to leave your life, borrow their money. Why test the theory in practice, it is better to simply deny the debt, citing difficult financial times. Why take a detour when you can borrow from the bank for the same weeks and even at low-interest rates?

Overdrafts as a type of loan

What does an overdraft card mean? This sentence from English translates as a “super account”. Worldwide, this service is gaining popularity every year, not only among business people but also among the normal working class. You can independently calculate what limit the bank can open for you if the application is approved.

The overdraft amount must not exceed the average salary of the applicant for three months. If the contributions are regular in nature, the customer can withdraw money from the account until the contract expires.