Can You Increase Your Loan Amount After Approval? Here’s What You Need To Know

Getting approved for a personal loan can be a huge relief The funds can help you consolidate high-interest debt, finance a large purchase, or cover unexpected expenses But what if after you get approved, you realize the loan amount isn’t enough to meet your needs? Is there anything you can do to increase the loan amount after approval?

Why You Might Need More Funds After Approval

There are a few common reasons borrowers find themselves wishing for a higher loan amount after already getting approved:

• Underestimating costs: When initially applying, you may underestimate how much money you need. For example, home improvement projects often end up costing more than expected.

• Emergency expenses: An unexpected emergency like medical bills or car repairs can leave you needing more money than your approved loan amount provides.

• Changing needs Even if your loan amount seemed sufficient at first your circumstances or plans may change leaving you requiring more funds.

• Opportunities arise: A new investment opportunity or other chance to use money strategically could present itself after a loan is approved.

No matter the reason, it’s understandable to find yourself hoping for a higher loan amount post-approval.

Is It Possible to Increase the Amount?

The short answer is no – most lenders will not allow you to increase the loan amount after approving you for a specific amount.

Here are some key reasons increasing the amount is usually not possible:

• Underwriting is complete: The lender has already verified your income, expenses, credit, and existing debts and approved you based on your qualifications and ability to repay the specific loan amount. Altering the amount would require starting the underwriting process over.

• Rates are set: Your interest rate and repayment terms are tied to the original loan amount’s risk, changing the amount could worsen your rate.

• Paperwork is processed: After approval, paperwork is completed and sometimes funds are already reserved or disbursed. Modifying the loan details is often administratively infeasible.

While some exceptions may occasionally occur, you generally cannot increase the loan amount after approval. Proceeding under the assumption you cannot change the amount is wise.

What Are Your Options If You Need More Funds?

If you get approved but realize you need more money, don’t panic. You still have options, including:

Apply for a second loan: There is no rule against taking out multiple personal loans. If you’ve paid down the existing loan and have a solid repayment history, lenders may approve an additional loan. Shop around for the best rates.

Use a credit card for some expenses: For smaller additional amounts, a credit card can bridge the gap. Just be sure you can pay off the card quickly to avoid high interest charges.

Change spending plans: Review your budget to find areas you can trim back on to make the approved loan go further. Downgrade features on a planned purchase or defer less vital expenses.

Save up: If your need for money isn’t urgent, you may be able to simply save up until you have the additional funds you require. Set up automatic transfers to a high-yield savings account.

Borrow from family/friends: For some, asking family or friends to lend money can be a good fallback option. Just be sure to formalize repayment terms to avoid issues.

Work overtime: Picking up extra shifts at your job is a straightforward way to earn the money you need above your loan amount.

Liquidate assets: Do you have any assets you could sell, such as stocks, bonds, or unused items around the house? This converts belongings into usable cash.

Negotiate costs down: If you need more funds to cover a specific purchase, see if you can get the seller/provider to reduce the price to fit your budget.

Wait and reapply later: If the need for money isn’t pressing, you may opt to wait several months, pay down debts, and improve your finances before reapplying for a higher loan amount.

Tips for Getting the Right Loan Amount From the Start

To avoid needing more funds after approval, aim to get the loan amount right from the beginning. Here are some tips:

• Thoroughly estimate costs: Do your homework to determine exactly how much money you need. Get quotes, research prices, and consider any potential hidden expenses. Plan for a buffer.

• Be realistic: It’s easy to underestimate costs and overestimate your income. Take a hard look at your budget and existing debts when figuring out what is affordable.

• Apply to multiple lenders: Comparing loan offers from a few lenders makes it more likely you’ll get approved for the ideal amount.

• Max out amount: When using loan calculators and filling out applications, choose the highest amount for which you might qualify. You can always borrow less than the maximum approved sum if you don’t need it all.

• Communicate needs: Work closely with your lender to share your financial situation and exactly how much money you’re hoping to get approved for and why.

• Have a backup plan: Even when you think you’ve applied for the perfect amount, something could go wrong, so also have a Plan B for getting additional funds lined up just in case.

The Bottom Line

While increasing your loan amount after approval is usually not possible, all is not lost if you find yourself needing more money than the loan provides. Consider alternatives like a second loan, credit card, budget cuts, or part-time work to cover any shortfalls. And next time, thoroughly assess your needs and apply for the maximum amount you may require plus a buffer. With some planning and creativity, you can find ways to secure the necessary financing.

Frequently Asked Questions

Can I ask the lender to increase my loan amount after getting approved?

In most cases, no. The lender likely will not be able to modify the approved loan amount, as the underwriting and approval process is complete. Some exceptions are possible, but it is best to assume the amount cannot be changed.

What if I only need a little bit more money than the approved amount?

Even for small increases of just a few hundred or thousand dollars, the lender is unlikely to alter the loan amount after approving you for a lower amount. You’ll need to consider alternatives like a credit card, second loan, or budget adjustments to cover the extra needed.

What if my income or credit score improves after approval? Can I get approved for more then?

Probably not. Even if your financial situation improves after getting approved, the lender cannot easily recalculate and change the loan amount without restarting the entire application. You would need to apply separately for a new, higher loan amount if your profile improves.

Should I exaggerate my income or provide false information to try to get approved for a higher amount?

Absolutely not. Providing inaccurate or false information constitutes loan fraud, which can have serious consequences including criminal prosecution, fines, and difficulty getting approved for future loans. Always be completely truthful when applying.

If I repay part of my existing loan, can I take out another loan for more money?

Possibly. There are no rules against taking out multiple personal loans. If you build a solid repayment history and have the income to qualify, lenders may approve you for a second loan for additional funds even if you have an existing personal loan not yet fully repaid.