What to include on loan application

GenD

Hi, I'm about to apply for a personal loan to pay off car finance and credit card at a lower rate. Found the best deal etc, and checked my credit rating and acceptance, so I know I can get the 2.8% loan, through Tesco finance.

But I remember last time I applied online, it asks for current credit card and loan balances, obviously. But there's nowhere to explain which bits are going to be paid off. Last time it was only my credit card balance, which is normally paid off in full every month. I declared the full balance, but then panicked and phoned them to explain it's going to be paid off, and the advisor said I should have declared it as zero in that case.

But now I've got a balance on a different card, plus the car finance, both of which are supposed to be paid off by the loan I'm applying for, plus my normal spending card which will be paid off in full as usual. So I don't want them to think I'm applying for the loan on top of those other debts, but I'm sure I can't just not declare them.

As the purpose of this loan will be specified as being to 'refinance debts' (which the previous one wasn't), does anyone know if there will be an option anywhere in the application process to show which bits will be paid off, by the loan or normal payments? 

I thought I'd ask for advice before i start the whole online application process, because I hate getting partway through something like that and then unsure what to put. If anyone's applied for a loan for that purpose before, I'd be grateful for any info, thanks.

[Deleted User]

They'll assume that the loan will be in addition to your existing debts, rather than paying them off, as that's what commonly happens.

So just declare your existing debts if you're asked, though you may want to pay off as much as you can first to minimise the total.

Ebe_Scrooge

As above - a lender has to assume the loan will be in addition to any existing debts, as they have no way of knowing whether you will really use it to pay off your debts, or put the whole lot on Lame Larry in the 3:30 at Cheltenham.

GenD said:

checked my credit rating and acceptance, so I know I can get the 2.8% loan, through Tesco finance.

Also remember - any eligibility checker will give you an indication of your chances of acceptance, but it's not until you've completed the application and they've checked your files that you'll know for sure.  Unless you've actually done a full application and got confirmation, you can't "know" that you'll be accepted at 2.8%.

GenD said:

As the purpose of this loan will be specified as being to 'refinance debts' (which the previous one wasn't), does anyone know if there will be an option anywhere in the application process to show which bits will be paid off, by the loan or normal payments?

There won't usually be an option to specify this - as per my first point, despite what your intentions may be, the lender cannot force you to use the loan to repay specific debts.

Sncjw

They will be assessing you on affordability of the loan plus your current debts as there's no garubtee you will use the money to pay it off. 

Also be warned you might not get the advertised rate it could be higher. 

GenD

Okay, thanks to everyone, at least I know now. Hopefully my credit's good enough to get the loan anyway! 🤞