Your credit: why “more” is often better


You have your finances under control and strive to save – that is sensible and correct. The less you pay for a product or service, the more your account will be spared.

“Less is more”, this old saying is justified in many areas of life. However, when it comes to the “right” loan amount, it can be a costly mistake. For a loan, sometimes it’s better to think and plan bigger.

Find the optimal loan amount

How small or big the credit you need depends on several factors. If there is a major purchase and you need, for example, new furniture or another car, then the purchase price determines the required loan amount. If you want to replace old loans or balance your account, the required amount is also fixed quickly.

After having roughly determined their financial needs, many consumers now make a mistake. Immediately need 3,500 euros, then apply for a loan in exactly this amount. If the financial need is twice as high, they ask the bank for 7,000 euros.

Why is this a mistake? Quite simply: In such a case, the loan amount from the first to the last penny is completely planned. Although you will then achieve your goal (financing the acquisition, account balance, debt restructuring), but you have no leeway beyond.

What do you do if you suddenly need money again shortly after borrowing? If you go back to the bank then you will most likely receive a cancellation. Renewed need for finance shortly after receiving a loan is an extremely negative signal for the banks. The result: You can neither increase your credit nor receive additional financing. So often there is nothing left but to take (again) the extremely expensive credit line.

Reserve directly with reserve

If, on the other hand, you apply for 4,500 euros instead of the 3,500 euros actually required, and instead of 7,000 euros you prefer 8,000 euros, then the bank usually has nothing against it. It is much easier to immediately realize a higher amount of funding than later to ask for an “increase”.

Even if you do not really need the extra $ 1,000, this reserve on the account makes you feel good – and most of all, you’ll be prepared for sudden unexpected expenses.

Especially in times of low interest rates, it makes sense to calculate the loan amount rather more generous.