In many cases, ongoing loans do not prevent you from needing additional loans. However, prospective borrowers are often concerned that the old debts would make it more difficult to lend. A loan is impossible despite current loans, the fantasy is. In truth, this concern can be completely unfounded – but it doesn’t have to be. It depends on the individual case. However, it is almost always possible to get the loan despite the older loans.
Creditworthiness is what matters most
The first question that the banks will ask you if you want to have a loan despite ongoing loans is the creditworthiness – i.e. your credit repayment ability. Donors want to see that you are able to easily pay the new monthly installments. After deducting all your monthly expenses, savings contributions and loan installments, you should retain at least 100 USD of your income. The savings banks want to see a surplus of 150 USD. If this is the case, you have no problem getting another loan. In such cases, banks are generally not even really interested in the older loans.
There is one exception, however: if you have existing debt, funding, or an overdraft facility that needs to be used often, most financial institutions will ask you for your bank statements of the past three to six months to ensure that there have been no chargebacks from your accounts. The lender has trusted you for the past three months – this is standard. For the past six months he has been suspicious and wants to be on the safe side before giving you the loan.
Loan Despite Current Loans: The Rescheduling Case
In a further case, at least your house bank, even with poor creditworthiness, will agree to the lending despite the fact that you have older loans: With a debt rescheduling. Now you can exchange an existing loan for a new loan that is cheaper. This actually improves your credit rating. The lending is therefore even in the interest of the bank that gave you the older loan, after all, the likelihood that you can easily repay the debt increases.
Credit despite ongoing loans with problematic credit ratings
If your credit rating is weak and you may also have problems with the Credit bureau, you can still get a loan despite ongoing loans. There are two ways to do this: First, you don’t take out the loan alone, but in pairs. On the other hand, you bring in a guarantor for lending who is at least responsible for most of the debt. If possible, all additional persons should have a strong credit rating.