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LOANS? Best to have 1 big or 2 small ones??


Jamesy

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Hi guys quick question regarding personal loans i need to ask:

 

Would you be better off having say 2 loans of around £9,000 each at a rate of around 3.9%.....

 

OR.....

 

Better to get one loan of £18,000 at 5.8%

 

 

Or does it not make much difference?

 

:hi:

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Depends on how long you are taking the loans over, also 3.9% is not the cheapest.

 

£9k over 5 years @ 3.6% = £163.90

 

£18k over 5 years @ 4.1% = £331.73

 

The other factor is your credit rating will have to be good, as each loan will reduce it. You may find it easier to get one big one than 2 small ones. Although I would opt for 2 Small ones.

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Depends on how long you are taking the loans over, also 3.9% is not the cheapest.

 

£9k over 5 years @ 3.6% = £163.90

 

£18k over 5 years @ 4.1% = £331.73

 

The other factor is your credit rating will have to be good, as each loan will reduce it. You may find it easier to get one big one than 2 small ones. Although I would opt for 2 Small ones.

 

:blink:

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I was reading about the 3.6 apr loans and apparently only 51% or something of people get it at that rate. The rest sign up for the 3.6 and get accepted at about 20% only. When you then argue and turn it down as it's not the apr you wanted, the application still goes on your credit file making it harder for you to get another loan or some such.

 

This info was from that money supermarket guy iirc

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I was reading about the 3.6 apr loans and apparently only 51% or something of people get it at that rate. The rest sign up for the 3.6 and get accepted at about 20% only. When you then argue and turn it down as it's not the apr you wanted, the application still goes on your credit file making it harder for you to get another loan or some such.

 

This info was from that money supermarket guy iirc

 

This scenario would happen only when you apply and you have poor a credit rating. It is unbelievable the amount of people that never seem to want to sort their credit history or even knew they had too. Especially when the 2 biggest CRA's give first time customers a 30 day free trial, which is more than enough to sort your credit history out.

 

Also in this case you can request the lender to remove the credit search footprint from your credit file. Alternatively if you obtain your credit file the CRA can remove it for you after contacting the lender.

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As Abz said, a single large loan should in theory come with lower interest. If nothing else, at least it cuts down on correspondence. :) If you were lending or investing, then obviously splitting it up can be a way of potentially mitigating any losses.

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I spoke to my bank they said id get a good rate. I didnt :( 16.1% apr but was still.with in my monthly pay back.budget i had set so wasnt too bad :)

 

That is because unlike what was said, banks cannot actually tell you what rate you will get till they actually do a credit check on you to establish your credit worthiness.

 

Only time they would be able to tell you what rate you will get is if they do not credit vet you.

 

If you got a rate of 16.1%APR that would indicate 100% that your credit score is very poor, I would suggest getting them from the big three and sorting it out.

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