Cheapest/ Easiest Source of Small Personal Loan for a Very Short Term

virhlpool on 23/04/2017 - 03:44
Last edited 23/04/2017 - 10:47

I and my partner are both employed. We are looking at purchasing a small investment property (~$300k) in SA and at the moment our savings is falling short by around $6k-$9k to meet the deposit requirement for loan at 80% LVR (i.e. 20% deposit from us). Of course, we can pay slightly lower deposit but it will attract LMI and also lower the chances of equity pull in future as is the case with any LVR higher than 80%.

Therefore, I may need a short term personal loan of say $8k for only about 2 months before we can save up and repay. Which are some of the cheapest and easiest sources to get this loan? Also, will this small personal loan adversely impact my credit rating/ eligibility for the main loan through the bank given that our borrowing eligibility isn't an issue otherwise?

Financial

Comments

  • chumlee on 23/04/2017 - 06:54

    Try ratesetter.

    All loans show up on your credit file but impossible to say if it will have a detrimental impact

  • jason101 on 23/04/2017 - 07:49
    +3

    I am not a loan expert but I am fairly certain other loans (ie the short term loan you seek) will lower your borrowing capacity considered by the bank when determining the amount they will lend on the principal loan or even worse disqualify your pre-approval for that loan (as you will then have other borrowings which you haven't disclosed to the principal bank). Rather than rely on advice here I think it may be a question for your mortgage broker or principal lender who may be able to offer a solution themselves to your issue. Another solution may be to simply go unconditional on your buying contract but ask for a longer settlement which will then allow you to save the extra $X before having your loan application processed. This level of risk may not be to everyone taste, but it's another option.

    • virhlpool on 23/04/2017 - 09:52

      I get your point but I wasn't planning to 'not disclose' the smaller, shorter loan when I apply for the principal loan. You simply can't hide it if the loan is from a legit source. I understand that it will affect my borrowing capacity just like any credit card does but to a small extent I guess.

  • Qroozn on 23/04/2017 - 08:29

    You would be better off increasing your loan by the $9,000. The LMI would only be charged on the $9,000 and would be less than the "Premium interest rate charge" that you would incur by trying to deal with a "small loan".

    If you are going to start shuffelling money around BEFORE you even have a loan then you are heading for trouble.

    • virhlpool on 23/04/2017 - 09:47

      Yes but I heard that with any amount of LMI, it is difficult to do equity withdrawal later. That is the reason I was trying to keep away from LMI territory. Do you think that the bank will treat smaller LMI more favourably than the bigger (say 82% LVR vs 88% LVR) when it comes to equity withdrawal?

      • Qroozn on 23/04/2017 - 10:27

        It sounds to me like you really need to see a financial adviser.

        I'm not a financial adviser nor do I have a financial background. But The only way I ( a layman) think for you to get the extra $9k would be to get a Personal Loan. But beware that any extra loan may look bad when you are trying to get a bank loan for the home, plus you need to declare all your debts. A bank would not want two parties having a fincancial interest in the same property.

        Is this by any chance for investment…. and you are trying to keep the negative gearing up? Again… see a financial adviser.

        I

        • virhlpool on 23/04/2017 - 10:47

          Thanks. Yes, it is for an investment property but not necessarily negative gearing though.

  • [Deactivated] on 23/04/2017 - 10:02

    try delay settlement if they want you to pay their asking price or lower their selling price before looking around for more credit

    • virhlpool on 23/04/2017 - 10:12

      Thanks. I am the buyer, mate. Didn't get your point exactly.

      • kipps on 23/04/2017 - 11:03
        +2

        The point is that you,as buyer, can ask for settlement date to be delayed. This will allow you more time to save up the rest of the money. If the seller agrees to extend for the time necessary to save up the difference you'll avoid the need for the loan, or to pay for LMI.

        • [Deactivated] on 23/04/2017 - 12:05

          Thanks kipps.

  • John Kimble on 23/04/2017 - 11:09

    Family?

    • virhlpool on 23/04/2017 - 12:23
      +1

      Last resource, mate. :)

  • [Deactivated] on 23/04/2017 - 11:24
    +1

    Wait and buy home in 2 months.

  • fruit on 23/04/2017 - 12:06

    Credit Card

    • virhlpool on 23/04/2017 - 12:23

      I need cash in bank account. Cash withdrawal on credit card is too expensive.

  • Ughhh on 23/04/2017 - 13:21
    +1

    I would assume having any kind of loan (personal loan, CC etc) would lower your borrowing capacity for a home loan, thus you would need to borrow even more cash for the deposit to make up for the lowered borrowing capacity, then that would lower your borrowing capacity again etc etc loop.

  • airal3rt on 23/04/2017 - 13:49

    Having just rewatched Underbelly, I can recommend Mario Condello.

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