Better to get £20k loan or two £10k

FrankieM

I was wondering if anyone has any experience in 'spreading their debt around'?

We currently need to get a £20k loan. My research shows that the interest rate is higher on larger amounts so I wondered if I would save myself money getting two £10k loans.

Has anyone done this?

Also does anyone know if this has a negative effect on your credit rating?

Apples2

You use the term We. Does that mean you are considering a Joint Loan?

If so, go for a £10k loan each. This will save a whole plethora of trouble later on if you split up and each trying to dump the whole loan on each other.

Joint loans tend to be more accessible due to the reduced risk (they have two people to chase for the whole amount)

Obtaining a £10k loan is almost considered a gold star achievement these days so obtaining two in the same household may be difficult in this climate (you would both be scored/risk assessed so both need an excellent salary/debt ratio with clean histories.

FrankieM

Yes, it is a joint loan..though I don't work so it is based purely on my DH's salary. I'm guessing in that case that we couldn't do one each?

Do you think that 2 £10k loans would be harder to get than 1 £20k?

Tixy

Could be a bit harder to get - due to the credit applications.

Lets say first loan you apply for and get. This will show up as a credit application search on your credit file but won't say how much you've applied for. The whole account with the amount of the loan etc won't appear for 1 month or so on your credit file.
So you then try application 2 - they see that you already have 1 application so don't know if you were accepted or declined and don't know how much credit you applied for with the last account (could have been £10k, but could have been say £25k), so they second one will find it much harder to rate your affordability for the loan.

If you add in to that you might get 1 or 2 declines then you could end up with a lot of applications making you look desperate for credit and a higher risk.

Before you start applying at all have you assessed how likely you are to be accepted for £20k of new credit? It isn't particularly easy to get loans this sort of size at the moment.

How much does DH earn? what existing debts do either of you have? what existing credit accounts and unused credit on open accounts do you both have?