Sometimes one loan simply isn't enough, and you are so close to reaching financial stability. In times like these, it can definitely help if you "topped up" your loan. Think of it as getting another loan, without all the hassle of complicated paperwork. Refinancing a loan is a quick and useful feature many lenders provide, just in case the borrower miscalculated by a little bit.
Although this seems fast and easy, there still are some points to consider. The first thing your lender would do is re-evaluate your case using your current or previous loan. If your original loan is marginal, or if you have given your lender trouble during repayments, it may be better to seek out a completely different lender instead. Also, expanding on the point of trouble with repayments, make sure with this new increase in your loan, that you are able to pay it off without much trouble.
Deciding upon the right lender
The easiest choice is to stick with your current lender, unless you are not satisfied with them, or vice versa. Also keep in mind that a loan top up may not work for everyone. Some lenders prefer to grab customers from their competitors, so looking around before deciding definitely helps out.
It is actually recommended that you choose a different lender, and preferably stay away from the affiliated lenders as well. As mentioned earlier, competitors may see you as a valuable customer. If they approve your loan, not only are they grabbing you from their competition, but they are also sure that you repaid your previous loan without too much trouble. By shopping around, you can easily find yourself a nice bargain. However, keep in mind that a new application is required when applying with a different lender, so you are sacrificing simplicity for it.
Obvious restrictions that you need to report
There are many circumstantial changes that you must report if they apply to you. These will hinder your success rate greatly, but it is what needs to be done. From the time of the assessment for your original loan, some things may have changed. Your asset may have additional finance owing on it, it may be sold off completely, income or cash flow may be weaker, etc. Even though reporting any of those may reduce your chances of success to zero, you need to report them regardless. Failure to report these important changes may result in a lot of legal trouble, and it simply isn't worth it in the end.
Changes in terms and conditions
Having a new loan entitles you to new conditions for your contract. You are able to re-pick the ones that are suitable to your new financial situation. Not only that, but you are able to change the type of loan you are after. This is another reason why picking a new lender could outweigh the advantages of sticking to a top up. For example, if you found that your original unsecured loan takes too much from repayments, this time you can apply for a secured loan and see the difference for yourself. All in all, this method allows the borrower to have a second chance, now that they have survived their first loan.
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