Borrowing more then I might need?

ChristopherM87

Looking to borrow £15-£25k over 36 months for home improvement. Would it be better borrowing £25k then £15k just in case I need the extra money? Or borrow £15k and get another loan later if needed?

Tixy

Borrowing £25k on an unsecured loan will likely be harder to get accepted for than £15k (though obviously depends on your financial situation/income/debts etc).

Representative APRs tend to be higher on loans above £15k compared to loans just below £15k.

Even at the same APR borrowing more than you need will cost you unnecessarily in interest.

I would try to work out as close as you can what you will actually need and apply for that.
And if costs do end up slightly higher another option to consider might be trying to get a credit card with 0% on purchases at the point you need it?

ChristopherM87

Thanks for the advice. What is the best way to shop around without affecting my credit score? A loan application at Zoopla says it does not affect it?

Tixy

Zopa and nationwide loans both use a soft search/quotation search on your credit file.

There may be some others that offer this as well now, but I am not sure who.

ChristopherM87

Would submitting a application query be a good test to see what kind of APR I could get? M&S do a 4.3% approx for £15k.

Herzlos

Don't take out the extra loan until you need it, then you won't be paying interest on it for however it is between either taking it out and needing it, or taking it out and paying it back. Save the repayments you would have been making and use that up first.