Should I clear small loan before applying for Top up

Luckycharm

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I am thinking of Topping up - probally in a month though after coming back from holliers. I have a loan with about €2200 left on it - would I be best to clear that off assuming I have any money left after my holiday or having the money in my bank account . I was going to clear off this loan as part of my top up.
Which way would be more preferrable to my application - healthy bankbalance never missing any payments on loan or not as healthy bankbalance with loan cleared.
 
I would imagine that a lender would prefer to see no other loans rather than a loan outstanding and savings on deposit when assessing an application for a loan/topup. In any case it doesn't make much sense to be borrowing if you have money spare if that's the existing situation? Lastly even if you do consolidate the €2,200 onto the mortgage then you should bear in mind that if you pay this over the full mortgage term (e.g. a few decades) rather than the original unsecured loan term (e.g. a few years) then it will probably cost you significantly more.
 
Yes, you are better to clear it off.

And, if you don't it shouldn't effect the amount of top-up you are looking for, providing your income allows for it.

J
 
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