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Should I pay off personal loan?
Durhamdad
Posts: 3 Newbie
I am currently going through a divorce and we are splitting equity in our home 50/50. However, I took out a personal loan of £12000 in my name three years ago to get new windows and doors fitted and a new bathroom.
As this was taken out for the home we have agreed it will be repaid in full from the equity before we split what's left. However, I currently pay £159 per month on this which is obviously impacting how much I can borrow because of affordability etc.
I have enough in my savings to pay this loan off, or significantly reduce the monthly payments, but I'm stuck as what to do. Don't see why I should use my own money to pay it off when it was the home and will be settled on the house sale. But equally, how much is it effecting how much I can borrow?
Any suggestions would be gratefully received.
As this was taken out for the home we have agreed it will be repaid in full from the equity before we split what's left. However, I currently pay £159 per month on this which is obviously impacting how much I can borrow because of affordability etc.
I have enough in my savings to pay this loan off, or significantly reduce the monthly payments, but I'm stuck as what to do. Don't see why I should use my own money to pay it off when it was the home and will be settled on the house sale. But equally, how much is it effecting how much I can borrow?
Any suggestions would be gratefully received.
0
Comments
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Put it in your lender's online affordability calculator and note the output. The remove it and note the output. What's the difference?
Be careful as some lenders still "tax" your affordability with a loan payment even if it has recently been/will be repaid.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.1
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