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Top Up Loan - Damage Credit Score?
Comments
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Morning.
Quick question - can topping up a loan damage your credit score? Does it look bad on file if you pay off an existing loan with a new bigger one?
Which credit score since there's no such thing as a universal credit score? The opening of the new loan and closing of the old loan will appear on your credit file(s) and each lender will assess it differently so the answer really is...it depends.0 -
Depends what the current loan stands at and how much you thinking of asking for and if its with the same lender.
Other lenders may just see it as an extra loan and decline you.0 -
As your debt increases lenders will get a little less likely to lend.
As it reduces this will reverse.
Not much difference is the reality.0 -
Thanks for the info. It's the same lender - the plan is to pay off the outstanding balance (~5K) with a new loan (~15K) and then continue to pay the remaining 10K in my usual monthly direct debits.0
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Once you pay off the original loan, your monthly payments will stop.
New monthly payments will be set up for the new loan, which will be determined by the rate and term offered.0 -
Thanks for the info. It's the same lender - the plan is to pay off the outstanding balance (~5K) with a new loan (~15K) and then continue to pay the remaining 10K in my usual monthly direct debits.
As long as you explain that is what you want to happen you should be fine, they might not be the cheapest lender though so take that into consideration.0 -
OK - thanks very much for the info!0
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Usually the new loan will replace the old loan, if it’s the same company (at least that’s what Zopa do).0
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