Need bank loan but will if affect Universal credits?

Soconfused14

Need to get a bank loan for £5000 to cover some needed home improvement.
Obviously this amount will be in my bank account temporarily so will if affect my universal credits as will have over £6000 in cash/savings for a short while between getting the loan and paying it out?

TimeLord1

Probably best talking to a credit union they will consider it.  Apart from that most banks will be difficult to deal with unless it's on a credit card. You could also apply for a budgeting loan via UC 

TimeLord1

Local councils will also do certain grants for improvements depending on your circumstances. 

Grumpelstiltskin

I think before you think of taking on debt whilst in receipt of UC, and  by the way are you sure you will get a loan at a reasonable rate of interest?
You need to go across to the Debt Free Wannabe board and bare your soul with the good people on there to see what your financial position is.

Soconfused14

Thanks for replies. I am in no debt at the moment and can get a bank loan . What I need to know is how will having that money in my bank for a short time til I pay for home improvement, affect my universal credit. Do  I have to declare it as will take me over £6000 in my bank for that time

poppy12345

For UC purposes what counts is your circumstances on the last day of your assessment period. If the money goes into your bank and out before the last day then you will be fine. 

andrewmp

Grumpelstiltskin said:

I think before you think of taking on debt whilst in receipt of UC, and  by the way are you sure you will get a loan at a reasonable rate of interest?
You need to go across to the Debt Free Wannabe board and bare your soul with the good people on there to see what your financial position is.

Loads of people take on debt, including mortgages, while claiming UC.

This might be the only debt he has and it might be manageable.

Soconfused14

@andrewmp. Yes this will be my only debt. I usually save up but not got enough to do what needs doing right now. Will be overpaying with the money I have managed to save up so goes quickly .

peteuk

Soconfused14 said:

@andrewmp. Yes this will be my only debt. I usually save up but not got enough to do what needs doing right now. Will be overpaying with the money I have managed to save up so goes quickly .

Check out the interest rate, rather than overpaying with your savings would it be better to get a smaller loan and top up with the savings?

Soconfused14

The problem with a smaller loan is the interest rate is much higher, like 12% instead of 6%. The savings were earmarked for this home improvement anyway so I plan to pay my savings off the loan asap, saving me interest and using the money for what I intended.

peteuk

Soconfused14 said:

The problem with a smaller loan is the interest rate is much higher, like 12% instead of 6%. The savings were earmarked for this home improvement anyway so I plan to pay my savings off the loan asap, saving me interest and using the money for what I intended.

It was a thought, glad you've already thought of it and checked it out.  However (mainly for others who may think about doing the same) the balance is pay more per month and pay less in total.  You save £90 in interest by taking the larger sum.

£3000 at 12% over 3 yrs is £3555.58 -payments £98
£5000 at 6% over 3 yrs is £5463 -payments £151