Unsecured loan 15 August 2022 at 10:46AM in Loans 9 replies 536 views

adamik25

Good Morning MSE colleagues,
Happy Monday!

I appreciate this might've been covered but I was not able to find such thread. 
I'm struggling to find out how much I can borrow via unsecured loan. My situation is as follows:

1) I currently live in UK.
2) I make approx 90-100k per year.
3) No mortrages, no CC etc, I basically always pay cash.

I'm considering buying property in Europe, I would not be able to take mortrage outside UK unfortunately (and UK banks won't offer mortgage for property abroad). That said, I do have some savings so I was planning to take ideally few personal loans and just pay them off.
I can see that my bank (HSBC) can give me up to 50k personal loan (with 6,7% APR over 30k, otherwise 3.9% APR).

Would I be able to let's say, do 3x30k with HSBC over span of eight years (that's maximum length)? I can easily afford it but not sure I would be allowed to take multiple loans. 
Even taking 3, monthly cost would be 3x£360=£1080. I could easily cover twice as that.

If similar thread was discussed, I would appreciate URL
Thank you.

Kind regards,
Adam

CKhalvashi

You may be able to do this but it typically will be against the terms of the loan. It is normally against loan terms to take more than 1 loan for a purpose, and again for buying property, so this may fail on this basis.

Also, having no debt you may find it difficult to secure this financing at a competitive rate. This is because there is no evidence of how you manage your money.

You will not be able to take 3 personal loans with HSBC (or any single bank) in a short time of each other.

[Deleted User]

I doubt they will lend for property purchases - even more so overseas.

Disregarding that, the amount you can borrow will depend on affordability and risk - but 90k looks very unlikely.

adamik25

Thanks for respones albeit I'm not sure I follow. For these loans that I can request in app, this seems to be automated and I don't really have to give reason? I can select a vague one like "car", "home improvment" or simply "other". It seemed that loan would be automatically approved/denied.

CKhalvashi

adamik25 said:

Thanks for respones albeit I'm not sure I follow. For these loans that I can request in app, this seems to be automated and I don't really have to give reason? I can select a vague one like "car", "home improvment" or simply "other". It seemed that loan would be automatically approved/denied.

And lying would be fraud.

You generally can borrow for home improvements, but not for the actual purchase of a property. Assuming the property is in the Schengen area, remember that assuming a British passport you will be limited to 90 in 180 days in the area, including any other business or tourism travel.

Brie

Is there a bank where you want to buy the property?  I'm thinking Santander if you wanted to buy in Spain and applying via them in Spain?

CKhalvashi

Brie said:

Is there a bank where you want to buy the property?  I'm thinking Santander if you wanted to buy in Spain and applying via them in Spain?

A non-EU citizen/resident is very unlikely to be able to get even a bank account, let alone a large loan without residency permit covering the period of it. You'd be surprised at the amount of paperwork needed just to open a business bank account post-Brexit where one director is resident outside the EU (this was never a problem before).

I agree though potentially this is worth a try.

Edit: That director is an EU passport holder just for clarity, most people will be in a position worse than that.

Clive_Woody

adamik25 said:

Good Morning MSE colleagues,
Happy Monday!

I appreciate this might've been covered but I was not able to find such thread. 
I'm struggling to find out how much I can borrow via unsecured loan. My situation is as follows:

1) I currently live in UK.
2) I make approx 90-100k per year.
3) No mortrages, no CC etc, I basically always pay cash.

I'm considering buying property in Europe, I would not be able to take mortrage outside UK unfortunately (and UK banks won't offer mortgage for property abroad). That said, I do have some savings so I was planning to take ideally few personal loans and just pay them off.
I can see that my bank (HSBC) can give me up to 50k personal loan (with 6,7% APR over 30k, otherwise 3.9% APR).

Would I be able to let's say, do 3x30k with HSBC over span of eight years (that's maximum length)? I can easily afford it but not sure I would be allowed to take multiple loans. 
Even taking 3, monthly cost would be 3x£360=£1080. I could easily cover twice as that.

If similar thread was discussed, I would appreciate URL
Thank you.

Kind regards,
Adam

For starters, having a thin credit file with no history of borrowing then repayment, getting any kind of loan at a reasonable rate might be tricky. Getting £90k worth of loan is highly unlikely (especially considering your income).

Trying to get three loans for £30k from the same lender would be challenging, but even if possible, I suspect the APR on the second and third loans would be considerably higher (increased risk as level of debt increases).

adamik25

Thanks for responses all. I was thinking about relocating to Poland, I have EU passport.
That being said, getting mortrage in PL is nearly impossible for someone earning in £. There's a law forcing to take mortrage in currency your income is, and post brexit, none of the banks offer such mortrages in Poland.

I do believe that an income of c.£90k should give me some flexiblity? I'm just not sure how the process of a loan actually works here. 
I don't mind taking few loans at seperate banks? I guess my point is that it should be fairly feasible to take a cash loan equating to roughly your yearly income?
Just looking for best way to do this?

Clive_Woody

adamik25 said:

I don't mind taking few loans at seperate banks? I guess my point is that it should be fairly feasible to take a cash loan equating to roughly your yearly income?

Often quoted on here is that lenders may loan up to 50% of your yearly income, I suspect borrowing 100% of your income in loans is unlikely (or if possible, at eye watering APRs)