How does a top up loan work? I'm finding it a bit hard to find examples

ryan_holton

Hi, I took out a Nationwide personal loan a few years back for 60 months, for the purposes of this explanation, the loan was for £15,000, meaning I'm paying X per month right now, I've got 28 months left of this loan and would like to borrow some more, so I investigated how I'd do this. Nationwide do top up loans, but you can't borrow a combined loan of more than £25,000 which is fine, I don't intend to. But let's I want to now borrow another £5,000, would my new monthly repayments be based on the theoretical amount of a loan for £20,000 (because the £15,000 is paid by the bank and then I get the £5,000), or would I be paying monthly for just the new amount and whatever it's monthly repayments are?

Can I have an example? I'm struggling to get my head around this

[Deleted User]

Your monthly repayments will be based on the total borrowing and term.

Numberwang_2

Additional borrowing options

During the application process you'll have the option to either:

• Top up your existing loan
  This will mean consolidating your existing Nationwide Personal Loan with the new money you want to borrow. Your new loan will replace the old, which will be closed and you'll then have one monthly repayment. See your loan agreement for information on repaying your loan early. The total amount borrowed must not exceed £25,000.
• Take out a second Personal Loan
  This will mean you have a separate loan that sits alongside your existing one that you'll repay separately, you'll then have two monthly repayments. Your existing loan will remain under its original terms and rate. The total amount borrowed on these loans together must not exceed £25,000.

Numberwang_2

Depends what you choose, either have one loan with 1 payment or two loans with 2 payments.
 I’m guessing option 1 will come with an early repayment charge on the old loan, but option 2 will be higher interest on the smaller 5k second loan?

[Deleted User]

ryan_holton said:

Hi, I took out a Nationwide personal loan a few years back for 60 months, for the purposes of this explanation, the loan was for £15,000, meaning I'm paying X per month right now, I've got 28 months left of this loan and would like to borrow some more, so I investigated how I'd do this. Nationwide do top up loans, but you can't borrow a combined loan of more than £25,000 which is fine, I don't intend to. But let's I want to now borrow another £5,000, would my new monthly repayments be based on the theoretical amount of a loan for £20,000 (because the £15,000 is paid by the bank and then I get the £5,000), or would I be paying monthly for just the new amount and whatever it's monthly repayments are?

Can I have an example? I'm struggling to get my head around this

If you took out a £15,000 loan with a 60 month term and only have 28 payments left then you can't still owe £15,000.  So no, if you now borrowed £20,000 you wouldn't get £5,000.

The options for further borrowing from Nationwide are give above by @Numberwang_2