Top Up Loan - Damage Credit Score?

Options
Euay
Euay Posts: 5 Forumite
in Loans
Morning.


Quick question - can topping up a loan damage your credit score? Does it look bad on file if you pay off an existing loan with a new bigger one?

Comments

  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Options
    Euay wrote: »
    Morning.


    Quick question - can topping up a loan damage your credit score? Does it look bad on file if you pay off an existing loan with a new bigger one?

    Which credit score since there's no such thing as a universal credit score? The opening of the new loan and closing of the old loan will appear on your credit file(s) and each lender will assess it differently so the answer really is...it depends.
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
    Name Dropper First Anniversary First Post
    Options
    Depends what the current loan stands at and how much you thinking of asking for and if its with the same lender.

    Other lenders may just see it as an extra loan and decline you.
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    Options
    As your debt increases lenders will get a little less likely to lend.

    As it reduces this will reverse.

    Not much difference is the reality.
  • Euay
    Euay Posts: 5 Forumite
    Options
    Thanks for the info. It's the same lender - the plan is to pay off the outstanding balance (~5K) with a new loan (~15K) and then continue to pay the remaining 10K in my usual monthly direct debits.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    Once you pay off the original loan, your monthly payments will stop.

    New monthly payments will be set up for the new loan, which will be determined by the rate and term offered.
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
    Name Dropper First Anniversary First Post
    Options
    Euay wrote: »
    Thanks for the info. It's the same lender - the plan is to pay off the outstanding balance (~5K) with a new loan (~15K) and then continue to pay the remaining 10K in my usual monthly direct debits.

    As long as you explain that is what you want to happen you should be fine, they might not be the cheapest lender though so take that into consideration.
  • Euay
    Euay Posts: 5 Forumite
    Options
    OK - thanks very much for the info!
  • Car1980
    Car1980 Posts: 301 Forumite
    First Anniversary First Post Combo Breaker
    Options
    Usually the new loan will replace the old loan, if it’s the same company (at least that’s what Zopa do).
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.4K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.8K Spending & Discounts
  • 235.5K Work, Benefits & Business
  • 608.4K Mortgages, Homes & Bills
  • 173.2K Life & Family
  • 248.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards