Loan as Parent or Not?

Earthwrm

Hi Everybody,


This may be a stupid question but it's worth an ask I think:


I am looking to take out an unsecured loan in the near future for around £14,000 (whatever the bank will lend me really) for a building project. I am also about to become a father for the first time around New Year.


So what I was wondering is: Does being a parent affect how much a bank will lend you? That is, would it be better to take out the loan before or after our baby is born, or does it make no difference?


I have no other debts and my credit is pretty good, and I have some savings put aside too if that would affect anything.


Sorry be so naïve, I've never had a loan before and don't want to accidentally shoot myself in the foot!


Thanks


Martin

BugsyBrowne

No other debts you say suggest you've got a very limited credit history for the lender to access your past behaviour with credit.

Good credit means you've successfully managed credit cards, loans etc in the past.

They're interested whether you'll pay them back so having a baby will have little effect.

People who haven't had credit before automatically becomes high risk.

Your best bet is your bank though as they'll know your history.

Earthwrm

Hi Bugsy,


I have had a credit card for the last ten or so years which I use for all my internet spending, I just always pay it off and so have no outstanding debts. Sorry, I should have made that clear!


Coincidentally I was thinking of having the loan through my bank anyway, it's pretty competitive, and also convenient.


I was just wondering if banks assume I will have much higher outgoings with a child, and thus not so much spare cash, and thus have less available to spend on potential loan repayments (larger loan = bigger payments). In reality he shouldn't cost us that much (for the duration of the loan at least) as we're pretty thrifty.


Thanks for the advice though!

poppasmurf_bewdley

I don't think my bank ever knew how many kids I had, and I had several loans with them over the years.

So I don't think it matters, one way or the other.

They're much more likely to look at how you manage your account.

redpete

I've not been asked if I have any children when I've had loans in the past - so it wouldn't have made any difference.