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How to Ask for a Personal Line of Credit When You Already Have a Debt

Posted By:  |  August 22, 2014  |  0 Comment(s)

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If you are looking to procure a personal line of credit, you are probably looking for a simple and cost-effective solution for paying off major purchases, like renovating your home, or you’re simply looking to cover unexpected personal expenses. However, you might be unsure about your options in terms of a personal line of credit if you already have preexisting debt. Here are a few things to keep in mind when you are thinking about approaching a financial institution to acquire a personal line of credit.

Approach the Financial Institution You Know and Trust

It makes the most sense to approach the bank you already know and trust when you want to acquire a personal line of credit, because it’s more likely they have your best interest at heart and will go the extra mile to get you a good deal in order to keep your business. If you have had a good relationship with your current bank, in terms of making payments on your preexisting debt on time and cultivating a professional and positive rapport, they will be more likely to approve a new loan. Also, depending on the relationship you have with your current bank, they may be more likely to be forthcoming about a better option with another bank, which means you might feel more comfortable asking more questions about all of the options available to you before you begin the process of acquiring more debt. If you are looking for a personal line of credit to consolidate the debts you already have with your bank in order to gain more control over your finances, your bank will be more willing to work toward a positive resolution to your debt. It is in their best interest to do so.

Have an Effective Plan to Pay Off Your Current Debt, and Put That Plan In Motion Immediately

Making payments on your preexisting debt is one of the most important things you can do to make yourself a more attractive option to banks when you’re looking for a personal line of credit. Like almost anything else in life, it’s how you enter into a situation that will determine the outcome. By being as fiscally responsible as possible with your preexisting debt and learning from the mistakes you may have made in the past, you will be more adequately prepared to take on more debt. Do as much research and homework beforehand as possible. You should find the best lending rate, calculating exactly how much money you need so you don’t borrow more than you need, and establish a realistic timeline that takes into account how long it will take to pay off your new and preexisting debts.

A personal line of credit is usually a cheaper option than acquiring more credit card debt, but there could be certain fees you aren’t expecting. Most banks will charge a maintenance fee, for instance, if you don’t use the line of credit you’ve acquired. One of the biggest tips to keep in mind is that if you are currently in dire financial straits, it’s better to address that now, despite other debts you might have, than it is to let your financial concerns overwhelm your entire life. Your best approach is to ask a lot of questions, assume responsibility for your preexisting debt, and work with a bank that has your best interest at heart.


  • How important is it to you for a debt consolidation company to offer financial education resources?
  • Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
  • Negotiates with your creditors on your behalf.
  • Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
  • Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
  • Combines all your debts and creditors into one monthly payment.
  • Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
  • You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
  • Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
  • Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
  • Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
  • Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
  • Borrowers can receive funds from their loan within only a few days.

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