Loan advice / Available credit

michaelsft

Hi all, I wonder if someone would be kind enough to help me with a little advice.

 I’m in the process of buying a house that needs quite a lot of work on it. To facilitate this I want to take out a loan of £20k over 7 years (as I’ve noticed rates seem reasonably low right now). I don’t plan to apply into in the house as I believe it could negatively affect my mortgage offer which was approved today.

i have no debt but I do have an overdraft facility of £3.5k and a credit card limit of £11,650. I sometimes use the card but pay it off each month. I never use the overdraft.

 It’s a lot of unused credit and I’m wondering if it would be wise to reduce some of that to help with a loan approval?

My second question is about overpayments on a loan, some allow this and it would be my intention to overpay each after the first year. Does overpaying reduce the interest you would pay or does that stay the same regardless?

 Thanks for reading!

[Deleted User]

Your available credit isn't high, so leave it.

You can overpay on all loans. It reduces the balance and therefore the interest charged.

DCFC79

The aprs you see aren't a guarantee you will get a loan at the cheap rates, when you apply is when you will find out the rate they offer.

michaelsft

Thanks for the replies! I understand it’s only 51% of customers get the advertised rate. Is it right to assume that if you don’t get that rate it could be anything else from 1% more to 10% more and it’s not simply that if you don’t get the best you get a standard bad rate?

I’m looking at Post Office, Virgin and Bank of Ireland as they’re my most eligible lenders (95%) at the best rates. These all seems like good lenders to me but is there one in particular that people think would be best to go for?

[Deleted User]

You'll never see Post Office or BoI in a 'good lenders' list, so of those three, Virgin are the best choice.