Shawbrook Loan

johndawgylt

Hi There,

I am in £10,000 debt, £5,000 with Amigo Loans, paying 59% interest, and £5,000 from a combination of a credit card default and current account overdraft default - I was paying them back £100 each monthly with charges and interest frozen.

I checked Credit Karma and since I paid off my additional £3,000 overdraft, it was showing me loans I was eligible for and Shawbrooks came up - has anyone used them and are they good?

I applied and got accepted for 17.9% APR, and I used the £10,000 to consolidate all my debts, and now pay Shawbrook (on behalf of totally money), £495 a month for 2 years.

Will this have a good impact on my credit rating that I have consolidated and paid those 3 creditors off, including the 2 defaulted accounts (defaulted in 2015 and 2016) ? Also, if I got some extra money and started paying a little more monthly, to clear the Shawbrooks loan debt quicker than 2 years, would this negatively effect my credit score?

This is all my credit / debit. I am trying to get out of the red in order to apply for a joint mortgage, so would the above course of action improve things for me?

All advice greatly appreciated.

Thanks

Regards,
J

foxy-stoat

Forget your credit score, only you can see it. Lenders look at your credit history.

As long as you dont miss any payments then it will only do good things for your history. 2022 and both defaults will be off your credit file.

Andyjflet

Good result, concentrate on getting it gone, the quicker the better then you can sort your mortgage.

johndawgylt

thanks for the replies - so you mentioned getting the loan paid off as quickly as possible - I'm paying £495 currently. If I was to pay an extra 500 a month to pay it off quicker, would this count against me as I'd be paying less interest, so less profit for the loan provider?

Would it affect my credit rating negatively paying it quicker?

[Deleted User]

The sooner you clear your debts, the better lenders will view you.

Your CRA credit treating may drop, but that's fine. Always think in terms of the risk that you present to lenders.

Check your agreement for details of how to make overpayments.

glennstar

johndawgylt wrote: »

Would it affect my credit rating negatively paying it quicker?

You make a valid observation. The Lender needs their money on the streets to earn interest to recover their costs and make a profit. Paying twice the amount will roughly half the loan duration in this case, which will take the loan term from 2 years to 1 year if - my interpretation of what you have said is correct. So unless the Lender is doing a shocking job of running their business they should be more than happy to get the money back and make a bit of a return.

And just as an aside, there is no mechanism as far as I am aware in PoR to indicate that you have paid early and that the Lender is not happy about it. With careful analysis of your record a Lender might be able to see that the loan was paid back early but in my experience it's highly unlikely another Lender, especially one using an automated decision engine, will have a rule to penalise you for that. It would appear too infrequently to have a statistical relevance and would require a pretty ballsy rick assessor to say "don't loan money to this person because they pay back".

So in summary - get it paid as soon as you can.

PaulW922

Paying a loan early should have no negative impact on the quality of your credit report. It will show as early settlement and I guess it is possible a future lender might see that and think there is less profit to made from you, but I doubt it. They are more likely to see you as reliable and likely to repay the debt. It certainly is not an adverse marker.