Need Advice on taking two personal loans at sametime

Praggu

Hi

I've been approved Personal loan from 2 different lenders for £24000 each (£48k total) for home improvements and to clear previous loan. I just want to understand, can I take both the loans? I can clear my existing loan and then will be left with 35k for home works. I will not have any problem in monthly payments, have good earning. Never had a single payment delay or bounce till date and have excellent score in CRAs.

My main question is 'what are the cons of having two big loans? (I understand my credit rate will go down etc. I am planning to clear these loans in 2 years and can build the score back once i clear these loans). Legally are there any limitations like I should not be having this much loan amount etc? I want to understand the implications before I sign the agreements. Can anyone please help me with this.

HappyMJ

Praggu wrote: »

Hi

I've been approved Personal loan from 2 different lenders for £24000 each (£48k total) for home improvements and to clear previous loan. I just want to understand, can I take both the loans? I can clear my existing loan and then will be left with 35k for home works. I will not have any problem in monthly payments, have good earning. Never had a single payment delay or bounce till date and have excellent score in CRAs.

My main question is 'what are the cons of having two big loans? (I understand my credit rate will go down etc. I am planning to clear these loans in 2 years and can build the score back once i clear these loans). Legally are there any limitations like I should not be having this much loan amount etc? I want to understand the implications before I sign the agreements. Can anyone please help me with this.

If you can clear them in 2 years nothing really.

It will take a few more months after the final payment has been made to show the loans have been settled.

DCFC79

Praggu wrote: »

Hi

My main question is 'what are the cons of having two big loans? (I understand my credit rate will go down etc. I am planning to clear these loans in 2 years and can build the score back once i clear these loans). Legally are there any limitations like I should not be having this much loan amount etc? I want to understand the implications before I sign the agreements. Can anyone please help me with this.

Your right your score will go down BUT only you will see the decrease, no lender can, all the lender will see is your history.

tonyh66

Praggu wrote: »

Hi

I've been approved Personal loan from 2 different lenders for £24000 each (£48k total) for home improvements and to clear previous loan. I just want to understand, can I take both the loans? I can clear my existing loan and then will be left with 35k for home works. I will not have any problem in monthly payments, have good earning. Never had a single payment delay or bounce till date and have excellent score in CRAs.

My main question is 'what are the cons of having two big loans? (I understand my credit rate will go down etc. I am planning to clear these loans in 2 years and can build the score back once i clear these loans). Legally are there any limitations like I should not be having this much loan amount etc? I want to understand the implications before I sign the agreements. Can anyone please help me with this.

If you can afford to pay £48K off in 2 years (payments of over £2K per month) how come you have £13k debt which you could have paid off in 6 months? also do you have a back up plan supposing your income is suddenly cut off by illness or redundancy etc.

Praggu

tonyh66 wrote: »

If you can afford to pay £48K off in 2 years (payments of over £2K per month) how come you have £13k debt which you could have paid off in 6 months? also do you have a back up plan supposing your income is suddenly cut off by illness or redundancy etc.

Thanks for this questions I understand your point. Yes, I thought about that.The reason I am confident on closing these loans is my wife is joining work now after maternity break, that brings home an additional £2.75k per month. Also, after 3-4 months I am planning to switch to contracting from permanent once my wife settles down. We both are into IT and I will have min (wosrt case) £500 daily rate (though the rate for my role and exp is ~£700). I could have closed the loan by consolidating the money after 6 months. But, don't want to delay on the works this summer. Also, the interest rate is cheap (Promised rate) that I see no reason to waste time. I might close even earlier than 2 years or take additional 6 months. Not sure on the timelines but will surely preclose around that time.

Coming back to my question, do you see any problem in having two big loans at same time. Does my current bank or lender treat this as any wrong doing? is there any upper limit for personal loan? I am not a financial guy or member of any finance related forums. I found this forum (MSE) in google today and just joined to post this question. Would appreciate genuine advices. Thanks for your time.

tonyh66

Praggu wrote: »

Thanks for this questions I understand your point. Yes, I thought about that.The reason I am confident on closing these loans is my wife is joining work now after maternity break, that brings home an additional £2.75k per month. Also, after 3-4 months I am planning to switch to contracting from permanent once my wife settles down. We both are into IT and I will have min (wosrt case) £500 daily rate (though the rate for my role and exp is ~£700). I could have closed the loan by consolidating the money after 6 months. But, don't want to delay on the works this summer. Also, the interest rate is cheap (Promised rate) that I see no reason to waste time. I might close even earlier than 2 years or take additional 6 months. Not sure on the timelines but will surely preclose around that time.

Coming back to my question, do you see any problem in having two big loans at same time. Does my current bank or lender treat this as any wrong doing? is there any upper limit for personal loan? I am not a financial guy or member of any finance related forums. I found this forum (MSE) in google today and just joined to post this question. Would appreciate genuine advices. Thanks for your time.

I don't think there is a problem having 2 big loans at once.

BrassicWoman

if the forms say you need to tell them if anything materially changes, then you need to tell the 2nd lender you have abig loan after the first lender has given you the money. Assuming they asked how much debt you had on the forms.

Otherwise they think they are lending to someone with no debt who in reality has 20k of debt, and that is misrepresentation on your part.

Praggu

BrassicWoman wrote: »

if the forms say you need to tell them if anything materially changes, then you need to tell the 2nd lender you have abig loan after the first lender has given you the money. Assuming they asked how much debt you had on the forms.

Otherwise they think they are lending to someone with no debt who in reality has 20k of debt, and that is misrepresentation on your part.

Thanks for your comments. We've decided to take one loan and start the work with out closing my previous 13k loan. The first Lender has confirmed it should be ok with them as I can have two loans with them for the amount upto 40k.

This thread can be closed now. Thanks all for your comments. Really appreciate your time. Thanks!

Gulam

Praggu wrote: »

Thanks for your comments. We've decided to take one loan and start the work with out closing my previous 13k loan. The first Lender has confirmed it should be ok with them as I can have two loans with them for the amount upto 40k.

This thread can be closed now. Thanks all for your comments. Really appreciate your time. Thanks!

If you combined the 2 loans would you not get a better interest rate?

Gulam

I was under the impression unsecured loans were capped at around 30k?