Will having quickly repaid a loan affect me?

bclark

Last July I took out a loan with Northern Rock in order to pay the final balloon payment for my Car, about £6000. Once this payment was made and I owned the Car I sold it and repaid the loan in full just one month later.

I have to admit this was planned as Northern Rock do not have any early repayment fees. My question is will this affect my chances of getting another loan? I am about to move to a new job with a company car so I am planning sell my current car which will involve me possibly doing the same thing again with a loan to clear the finance which I will pay off immediately with the proceeds once the Car is sold.

Is this a really bad idea for my credit rating or anything else?

Rafter

I doubt you will have any problems. There is no reason that paying off a loan should be detrimental to another loan application, with the exception of northern rock potentially.

This is because setting up the loan, processing paperwork, doing credit searches etc cost northern rock £'s that they are unlikely to have recovered in one month. They may therefore have you flagged as a customer they may not make money from and decline you accordingly!

Suggest you try egg or someone else without repayment penalties instead.

R.

Phantom_Flan_Flinger

Rafter wrote: »

I doubt you will have any problems. There is no reason that paying off a loan should be detrimental to another loan application, with the exception of northern rock potentially.

This is because setting up the loan, processing paperwork, doing credit searches etc cost northern rock £'s that they are unlikely to have recovered in one month. They may therefore have you flagged as a customer they may not make money from and decline you accordingly!

Suggest you try egg or someone else without repayment penalties instead.

R.

I'm now on my 4th loan with NR. The 3 previous have all been paid off early to no detrimental effect.

conspirator

Yes they will welcome you with open arms and no doubt a larger amount of credit for your pleasure.

Enjoy.

bclark

Many thanks guys. I can't really think of any other way to clear a final payment on a car as you can't sell it until you have paid it!