Personal loan to buy property in india??

vikramrkin

Hi,

I am planning to buy a property in india and want to know if I can take a personal loan for that purpose. I have a clean credit history.

I did a quick searc and I can get around £25000 for 4 years at 8.2%. What I am not sure is whether or not the purpose can be what I mentioned above.

Also, will it be an issue if husband and wife take individual loans (£25K + £25K)? Or it is better take a joint loan? Anything else I should consider?

Thanks for looking.

Vikram

paddyrg

You may have a hard time - you're looking for an unsecured loan (it is unlikely any highstreet bank will take an Indian property as security being unfamiliar with the local market conditions) for a huge amount of cash. That will mean the amount you can borrow will be limited by what you can afford, typically not exceeding 50% of salary (ie borrowing £25k will likely need a salary of £50k+ and NO other lines of credit (cards, overdraft, etc)). And even then, any lender might be nervous that you're about to up sticks and live in India without servicing the debt here.

Frankly I wouldn't hold out too much hope unless you can talk to an Indian bank who may be more accommodating if they can secure on the property

vikramrkin

Thanks for the reply. I thought by nature, personal loans are non secure (for example, I can use it for a holiday or marriage etc). So would banks really care what I do with the money? I thought they only want to know how I will pay their money. May be I am wrong!

Tixy

Unsecured loans of £25k are pretty hard to get. You'll need a good clean credit history and a high income. Do you have these?

If your wife also wants a loan of £25k she will also need a high income of her own and a good credit history - does she have these?

The banks will also take into account your existing financial commitments, when considering afforability.

Even if you are accepted for such a loan I think its unlikely you'll find one with an APR of 8.2%, APRs generally increase when people are borrowing more than £15k. If you've seen 8.2% advertised then that will only be the representative rate - not necessarily the actual rate you would be offered.

vikramrkin

Thanks Tixy. I guess I will have to speak to the lenders to find out. But I am worried they will do a credit search and it will create an entry in my credit file. Is it possible for me to ask them to make a search with out leaving an entry in my file?

Tixy

You could talk to your own bank about your financial circumtances and see if they think its likely you would be accepted for a £25k loan before they do a credit search, but it will only be a rough guide. But if you only earn say £30k a year they would be able to tell you that you have no chance of a £25k loan, without needing to do a search. Or if you earn £40k but already have debts of £15k then again they'll be able to tell you no chance.

But any more than that sort of rough indication and they will need to do a credit search to - and if will create an entry on your credit file - why would that be a problem?

I believe the only lenders who don't do a full search, just a soft search instead are nationwide and zopa. Zopa don't do £25k loans.

vikramrkin

Tixy wrote: »

and if will create an entry on your credit file - why would that be a problem?

I thought the entries on your credit file means less access to credit. So if I take quotes from four lenders, which create 4 entries, I will be declined a loan from the fifth one. Thats t he only reason I said it would be a problem. Again, I may be wrong with this one.

Tixy

vikramrkin wrote: »

I thought the entries on your credit file means less access to credit. So if I take quotes from four lenders, which create 4 entries, I will be declined a loan from the fifth one. Thats t he only reason I said it would be a problem. Again, I may be wrong with this one.

You are right, you don't want to go out and obtain lots of quotes - lots of searches will in the short term cause you an issue. You can't really easily shop around for loans. You just have to choose somewhere and apply and see what the result is, whether they accept you and whether its at a rate you are happy to accept.

If you want to apply for a loan there is no way round it. If the first bank declines you then chances are others will as well. Which is why most people recommend applying with your own bank first, as they are usually the ones most likely to lend to you.

I wouldn't apply with any more than 2 lenders, anymore and you will significantly reduce the chance of being accepted.

If you posted information about your financial circumstances (income, current debts, what is on your credit file, homeowner or not etc) then people on here should be able to give you a reasonably indication as to whether you might have a chance of a £25k loan.

vikramrkin

Just spoke to my bank and t hey said because it is for a property, I cant get a personal loan

I guess my search just ends there.

somethingcorporate

Surprisingly, it may not have been so if you had told them it was for a car! (not suggesting you do this, just at how arbitrary such decisions can be).