New loan, consolidate or get 2nd loan?

maxsharpie

Hi

2 years ago I took out a loan over 5 years and now want to borrow some more money. Am I better off getting a large loan that will settle the old one and give me what I need now or getting a second loan?

I am mostly concerned that "debt consolidation" loans may tend to carry penalties in terms of interest rates and possibly approvals?

Expert knowledge/opinions appreciated.

Thanks

[Deleted User]

Depends on the amounts, your rates, your income and your credit history.

maxsharpie

Original loan was for 20 at 7.9%, settlement is 13.7. Income 25 but I am retired with no other debt and perfect payment history but very little borrowing over the years. Looking for 20-25 for new loan.

[Deleted User]

I don't think you're going to get a loan for 20k plus. And definitely not able to consolidate the other one.

What other options do you have apart from getting a loan?

imoneyop

You've no chance of getting a 20-25k "consolidation" loan and very little chance of getting one for the extra 6-11k that you want.

maxsharpie

What is the problem you foresee? My finances are essentially the same and a 7 year repayment could be less than my current repayment.

The original loan has a "top up" feature that I could ask about or I am open to suggestion.

imoneyop

You earn 25000 and are expecting to borrow an amount that will give you total credit equal to or way in excess of that. You are going to fail any responsible lender's first check of credit vs salary.

The lender will also consider the worst case scenario that you borrow the full amount for a consolidation loan and then blow it on something shiny and end up with 2 loans and then default because you can't afford them both.

DCFC79

Cant really add anything else that hasn't already been said and good advice at that.

maxsharpie

Well it would be nice to be saying thank you for the expert knowledge and opinions that I asked for. Unfortunately I didn't get any. Instead see above some vaguely condescending, slightly self-righteous, inconsistent twaddle.

I called my bank, that I have been with for 12 years, had a long chat and was offered a 25k loan at 8.4 or a new loan of 7.5 at 5.9. I took the latter. The very knowledgable and soon to be underwriter that I spoke to told me he was aware of the forum and wouldn't recommend it, too many people who like the sound of their own voice apparently, too much wrong information. Like in this thread.

Although it is correct to say that many lenders will use a debt to income ratio approximating 100% it is only one factor. Also if you don't pay rent or a mortgage then it adjusts up accordingly. However to those with basic arithmetic skills it is clear that the new loan does not even breach this guideline.

So to those who have come to the forum for advice on matters such as this, my advice is pop to the kitchen and get yourself a bucket of salt or, better yet, just close the tab.

dealer_wins

Oh dear, another new poster that wont listen to good advise, probably slags off the very banks for making "excess profits" that he is happy to pay £1000s in interest (aka profit) to.

You couldnt make it up.

GingerFurball_2

maxsharpie wrote: »

Well it would be nice to be saying thank you for the expert knowledge and opinions that I asked for. Unfortunately I didn't get any. Instead see above some vaguely condescending, slightly self-righteous, inconsistent twaddle.

I called my bank, that I have been with for 12 years, had a long chat and was offered a 25k loan at 8.4 or a new loan of 7.5 at 5.9. I took the latter. The very knowledgable and soon to be underwriter that I spoke to told me he was aware of the forum and wouldn't recommend it, too many people who like the sound of their own voice apparently, too much wrong information. Like in this thread.

Although it is correct to say that many lenders will use a debt to income ratio approximating 100% it is only one factor. Also if you don't pay rent or a mortgage then it adjusts up accordingly. However to those with basic arithmetic skills it is clear that the new loan does not even breach this guideline.

So to those who have come to the forum for advice on matters such as this, my advice is pop to the kitchen and get yourself a bucket of salt or, better yet, just close the tab.

This has to be a wind up.