Credit Upgrades: Important Tips on Increasing Borrowing and Extension

Are you paying back a loan and want to top up the existing loan?


What do you do if you want to increase a current personal loan? Are you required to apply for the loan from the lender with whom you have already signed the first contract? And how does that affect the interest rate?

To increase credit means: new credit

Anyone who takes out a loan should always plan for a buffer because the financial and family situation can always change. If, during the life of an existing loan, you suddenly need more money than expected, you can top up the existing loan. You proceed as if you were making a new loan request. As a result, you must complete the online form once more and submit the necessary up-to-date documents to the lender.

The choice of the right lender

You are free to step up your loan to another financial institution or banking company other than the one with which you signed the previous contract. However, a credit increase is always an extension of an existing loan. Consequently, the existing lender is always the first point of contact when it comes to extending the loan.

Renegotiate the interest rate on the loan renew

The key question when extending credit is whether, as a borrower, after deducting all existing costs, you are able to pay a higher loan installment. However, as the credit increase is a new loan request from the bank, we are able to renegotiate the interest rate on the entire loan, not just the top up.

Increase or decrease the interest rate?

In most cases, when we increase credit, we can get a cut in the interest rate. But in extremely rare cases, increasing your credit can also lead to an increase in the interest rate, such as when your financial situation has deteriorated, or when your score has been downgraded due to, for example, too rapid succession of loan requests. Most Swiss banks will not lend unless at least 6 months have elapsed since the last loan and it has been fully paid off. Too many loan requests also worsen the credit rating.

Duration of repayment

If you extend your loan, you are free to set the length of the repayment itself: so you can either keep the original duration, extend it or shorten it, if you can.

Let us advise you before you make a binding loan request to extend the loan. We can make a non-binding loan request for you, which is not initially registered by the ZEK.