Life is a constant change – whether it is a place of work, place of residence or marital status: certain circumstances change regularly in our lives, which require that the rest of everyday life be adapted to it. A new job often requires a move, but a new salary requires an adjustment of the financial plan.
Anyone who is currently repaying a loan from the bank should not miss to adapt this part of their lives to the changes in everyday life. For most banks, it is not a problem to change certain factors, such as moving or new bank details in the loan agreement. A written notification of the change request to the bank changes certain information in the contract – additional costs usually do not arise for the borrower.
Report changes to the loan agreement in writing
It gets a little more complicated if the borrower’s financial scope changes noticeably during the term of the loan: If a salary adjustment or a change of job leads to the consumer suddenly having significantly more or less money to repay the loan debt, the bank should must be reported. The monthly repayment rate can usually be changed without problems even after the contract has been signed.
Depending on whether the repayment rate is reduced or increased, the term of the loan also changes and, under certain circumstances, the loan interest due. At most banks, even after signing the contract and paying out the loan, it is possible to increase the amount of money borrowed.
However, the consumer must also notify the bank of this request in writing. If the bank agrees to the increase in the loan amount, however, the other loan terms usually also change: In a new contract, the adjusted repayment rate, the term and the changed interest rate are recorded.
Improve credit conditions through subsequent collateral
Often, consumers also have the opportunity to improve their credit conditions after signing the contract and paying out the amount of money: through additional loan collateral that will be offered to the bank afterwards, the inclusion of a second borrower or a security such as a property or life insurance can usually also be offered to the bank retrospectively.
As the bank has a lower risk of default due to the additional loan security, the credit terms can be cheaper for the consumer. Just like all other subsequent changes, the inclusion of additional security must be communicated to the bank in writing.