You already have a financial obligation, but the financial situation forces you to apply for another one. What to do in that case? Is another loan possible? The answer is yes, but there are a few things to keep in mind.
When needs are large and opportunities are less
Each financial institution has certain rules according to which it grants its clients loans or credits. An important distinction immediately. In the case of banks, the Banking Act is of key importance in the regulations. In turn, for non-bank loans, the basic issues are resolved under the Civil Code and the Consumer Credit Act. What does this mean in practice? It often happens that the refusal to grant a loan does not, however, mean that the loan application is not verified.
However, it also happens that you already have a liability, eg a mortgage. At the same time, there are unexpected expenses for which there is simply not enough money. So you have to borrow. The first thought is a bank. Another loan is possible if you have a good credit history and creditworthiness. And here the stairs begin. With a high mortgage, it is difficult to boast of great credit standing – after all, the burden on the household budget is really high. As a result, the bank may reject the request for another commitment, even despite the high scoring in the database. This will happen when the bank finds that the income is too low (in the light of banking law principles) in relation to the monthly financial burden. In this case, the non-banking zone remains, more on this below.
From the bank to the loan company
The bank refuses, but this is not the end of the world. You can take advantage of the offer of one of the non-banking companies operating on the market. Chances are, although not every loan institution will do it. It depends on several factors. It is not true that loan companies do not verify the financial condition of a potential borrower at all. However, they do not have such stringent requirements as banks. Much depends on the amount of loan requested. There will be no problems when you want to get several hundred dollars, maybe even two thousand dollars. The higher the sum, the higher the requirements. Some non-bank companies check databases, while others use data from the database. It is better to check before applying for a loan which databases are being verified.
Analyzing a potential customer in terms of potential risk is not surprising. After all, no one will grant loans to beautiful eyes (especially since applications are submitted online). However, the requirements are much lower than those presented by the banks. You do not have to have such a high score in the database as when applying at a banking institution. You may also have a source of income other than those from your employment contract. In any case, you have a good chance of having both a mortgage and a non-bank loan.
Another dilemma concerns the possibility of having several loans at the same time. It is difficult to find a lender who would be willing to grant another loan if the previous one has not been repaid. In other words, when you request another commitment from the same non-bank company, you’ll get a refusal. The solution turns out to be taking a loan from another lender. One more option is available, ie a private loan.
When a loan company refuses
Then take advantage of the private (social) loan offer. In this case, you don’t have to worry about the database at all. Employment or income certificates do not matter. Private investors simply use other forms of security, such as a promissory note or pledge. Thanks to this, you get another loan with no problem, and its amount depends, for example, on the value of the pledge.
One thing – always carefully analyze whether a next commitment is really needed. Above all, however, will you be able to pay them back. It is better to avoid excessive debt.