Whether a loan is possible despite an existing loan depends primarily on whether the customer’s creditworthiness is guaranteed and will continue to be guaranteed after the borrowing. Otherwise it is unfortunately not possible to take out a loan despite the existing loan. It would be a good idea here to pay off the old loan and restore creditworthiness before considering taking out a new loan. http://creativekeys.net/car-loan-help-bad-credit-check-out-our-car-loan-if-have-bad-credit/ for an assessment
Installment loan and overdraft facility
A very common variant is the combination of an installment loan with an overdraft facility. The latter is usually granted whenever the customer can prove regular payments in his checking account. An overdraft facility has the advantage that it can be drawn on at any time and repaid flexibly. This is not the case with an installment loan. It must be repaid in equal monthly installments. The only exception would be if the bank permits special repayments or early redemptions.
If the overdraft facility is settled promptly, there should be no major problems. A loan despite an existing loan will only be necessary if the customer has additional wishes that he cannot finance from his current income, from his overdraft facility or his savings.
Multiple installment loans
As long as the income is high enough to service several installment loans, the customer can take out as many installment loans as he wants. It is not uncommon for a real estate loan, a car loan and a consumer loan to be paid off at the same time. Before taking out a loan, however, the bank will make very precise calculations of whether and to what extent this is possible. Under no circumstances should the customer have to pay so many loan installments that they are no longer able to make a living or to save money for major repairs or other unforeseen incidents.
In certain circumstances, it might be worthwhile to combine several loans into a single loan. If this procedure seems practical, the customer would only have to pay a monthly loan installment to a single office or bank. This would make his financial planning much easier and could give him a much better overview.
Pay off installment or overdraft facilities
It is not always advisable to take out a loan despite having an existing loan. In particular, if the general interest rate level is very cheap, it could be worthwhile to replace an old and sometimes much more expensive loan with a new loan. The same also applies in the event that a bank customer is unable to repay the overdraft facility on his own. A low-interest installment loan could ensure that the account balance is brought back to zero or in the positive range.