unsecured loan soon after mortgage

davegib20

Hi,

I have posted on here a few times and had some really great advice so im hoping you can help me again

I have recently completed on a new house. I have been so careful with money and gently managing my outgoings and credit rating for years in order to prepare for this and we moved in and love it. Finally having my own place is amazing.

However....My sister in law and her husband have money issues and need help. They have proposed that I get an unsecured loan of 20k in my name so they can consolidate and they pay the loan back by paying me - in return they will use some of the money to buy central heating for my new house. Although central heating would be nice as its near winter, I dont like the sounds of this at all, They are not frugal and I feel like this is a quick fix for a bigger problem leaving me with the responsibility.

How would a loan so soon after starting mortgage repayments affect the rate? I can afford the repayments but it will cut my expendable income in half and feel ive taken on enough financial pressure, I certainly dont relish another 5 years loan on top.

Any advice??

[Deleted User]

This sounds a dreadful idea.

Tell them no or that you applied and were rejected (which is likely if you have just completed on your mortgage).

RockOnZombies

This has trouble written all over it. Don't do it!

Your credit rating may take a dip after having taken on a mortgage, mine did when I took on an unsecured loan and it took a few months to recover. They really shouldn't be putting you in this position when you've just bought you're first house. If it was me I certainly wouldn't do this, you'll need as much free cash as possible to do stuff you want to your house anyway.

tomtontom

Run for the hills!

Or add the "family loan not paid back" threads to your favourites?

Polmop

I could write all over this page no, no, no, no, no, no, no, no, no, no, no
Ive been there, done that and got the t shirt.
Tell them you applied and got turned down

chesky

Now, you know really the answer to this don't you?
And why on earth would they even suggest 'using some of the money' to buy you central heating? Sounds to me like they're even more insulting, thinking that you'll be won over by their generous offer.

uncreative

Hard one, do they budget at all? what are the circumstances?

£20k is an awful lot of money. It could ruin your family if this debt went unpaid. I honestly think that you would be rejected in any case. Even if not, it would almost certainly kill off any chance of credit until thr loan was settled. Remember you are taking that loan out, it doesnt matter if your sister has set up an SO to repay each month, its your loan. Goodbye any chnce of you getting any loans yourself.

DCFC79

It has the potential to end terribly, not that your credit rating will be affected as lenders don't see that but you could end up lumbered with repaying the loan and your sister goes on very nice holidays.

27col

How does that work. You lend somebody some money and they spend some of it on central heating for your house. You can buy your own heating with a much smaller loan.
Never heard of anything that has keep clear written on it in such huge letters.
Consolidation is not usually a good fix for any financial problem.
If they can't keep their debts under control now, then how are they going to do it in future.
Another point to consider is, if the consolidation money is your loan then they would have absolutely no incentive to pay anything back. Don't touch this idea with a long bargepole.
You would be quite mad to even consider doing this stupid thing.

tonyh66

stupidest idea EVER......
are you earning over £40K to even be considered for a £20K loan? even if you ignored all the good advice above.
If you want CH either get a small loan if you can, and say you saved up for it, or save up for it..

WellKnownSid

tomtontom wrote: »

...add the "family loan not paid back" threads to your favourites?

This. It's a terrible idea, and from personal experience your family WILL:

(a) hate you / never speak to you again if you don't lend them the money
(b) hate you / never speak to you again if you do lend them the money and then expect repayments
(c) carry on with the same spending patterns that got them into the mess they were in prior to you bailing them out.
(d) comment unfavorably on your own indulgent spending patterns - especially when items (a) or (b) apply and you are 'seen' buying a latte or replacing your car in the future.
(e) blame you. For everything. Especially divorce or separation.