Benefits Of Applying For Unsecured Loans With The Same Lender

Once you have applied for an unsecured loan with a lender, chances are that you would rather apply with a third party. This is a common practice as many people think that the previous loan will prevent them from obtaining finance with the same lender. Not only this is far from true, but the benefits you can obtain by applying for a second unsecured loan with the same lender are worth considering.

The fact that you already have an outstanding loan with a lender may be negative or positive for your new application according to your repayment record and financial situation. The thing is that both these factors will affect your approval process with other lenders too and thus, there will not be much difference. However, there are several advantages that you can obtain when applying with your already known lender.

Avoiding Long Credit Verification Processes

As an existing customer, your credit score is probably already being monitored by your lender from time to time. Also, your credit worthiness has been established by the lender already as well as your ability to repay the outstanding loan. Thus, there will not be many hassles if you have to go through an approval process with the same lender as compared to what you would have to go through with another lender.

A simple credit pull and income verification may be required and sometimes, if the new amount is not that high, this can also be bypassed. After all, if you have already qualified for a loan with them and your credit and financial situation have not changed that much, there is no reason to doubt your ability to repay the new loan just like you were repaying the existing one in a timely manner.

Single Monthly Payment As Opposed To Multiple Payments

When you apply for an additional unsecured loan with the same lender, you get to make a single monthly payment every month instead of several payments like you would have to make if you took different loans from different lending institutions. This is really an advantage and provides at least two benefits for the borrower we can think of.

For starters, it is definitely cheaper. This is due to the fact that you will only pay for the costs of a single lender instead of two separate ones. Thus, unless you are dealing with an unscrupulous lender, you will only be charged administrative fees, and other costs associated with the lending process once. Also, the fact that you need to remember to pay to a single lender will contribute to avoiding delinquencies and thus keeping your credit clean.

Longer Repayment Program Or Higher Monthly Payments

When you request an additional unsecured loan with the same lender, there are basically two methods that can be used to provide the money. If you want to keep your payments the same so as to obtain the funds but avoid compromising your income any further, the lender can easily extend your repayment program so as to include the new amount keeping your monthly installments unaltered.

If you want to repay your loan sooner and you do not mind raising your monthly payments a bit, the outstanding loan can be fully cancelled and a new loan that includes both the amounts of the previous and the new loan will be assigned. The resulting installments will be a bit higher depending on the loan amount you requested but the repayment program will be shorter.