Personal Loans with Bankruptcy

[ashjt2011]

My second post!

I have a question. I am about 2 years out of Ch.7 - it will be my 2 year mark in December.

I got a personal loan to pay off a few credit cards. I was surprised I got approved for one. It wasnt the best interest rate but my credit cards aren't exactly either. So I figured in the long run having a personal loan reporting on my credit would look better then revolving debt.

I have had it for 2 months now. Someone recommended Prosper - so I was checking them out. And they said that checking my rate wouldn't affect my credit score. I didn't even have to enter my full SS #. So I did their prequalify thing and it said I qualified for a loan that was 14% less interest rate then my current one.

What would the reprecussions be if I took out this loan and paid off my one I got 2 monthes ago? Good idea? Or should I wait several more months with my current loan before I take out another one?

Also to note - I am in the process of buying a home under FHA as well.

I haven't made my signature yet but I have 2 Cap1 cards with 0 balance, 3600 in revolving between the 2. I have a third Cap1 that I am a authorized user on - Owe 2700/5500 limit. And I have a Barclaycard that I owe 200 on with a 1300 revolving limit. I have a car loan that I've had for 6 months. My fico when I checked the other day was 668.

[Scupra]

Since you are buying a house I would stop applying for things. Just sit tight and don't accumulate more revolving debt. I think paying off revolving debt with an installment loan is a great idea as long as you have the will power to NOT use the cards you paid off with the loan. Don't end up is the same spot you were in prior to the loan.

[ashjt2011]

Thanks for the advice! I will probably wait till after I close on my home loan and then refinance the personal loan down after a few months. I havent touched the cards I paid off with the original loan besides the 200 dollars on the Barclay Card which will be paid off next week. It was unexpected school expenses that accumulated most of the 4000 dollar loan that I paid off my school stuff. Maybe I will wait till my score hits 700 (which is should rather soon) and then get a much much better rate.

[Anonymous]

Who approved your first personal loan? I'm looking for a personal loan $3-5k and I'm 2 years post bankruptcy

[Anonymous]

Yeah.... don't do ANYTHING while you're trying to purchase a house that's like a big NO NO. Don't accumulate more debt, just pay off the debt you have currently. Don't take out any loans or anything, i mean ANYTHING. The slightest thing can put a wrench in your house plans, and with it being a federally backed program, such as FHA I wouldn't mess with it. They will pull your credit once when you apply, and then again before the house closes to make sure you can still afford everything and you didn't go out and buy a large ticket item or accumulate more debt thinking "it's all ok" since you were approved. Many times i've seen and heard of people have trouble with their financing if they muck about too much with their credit DURING a house purchase. Really be cautious. I also wouldn't suggest trying for a new loan or anything for at least 6 months after the one you just took out. It will look like pyramiding to lenders, and that will cause a lot of red flags.

[Anonymous]

If you haven't applied and had a lender pull your scores, I would remove myself as an AU from that other Cap1 card ASAP. Over 50% utilization is dragging your score down. You'll still have 3 TL's. Most likely, your LO will want you to remove it anyway unless it's a spouses account.

Leave the loan as is - I'm assuming that the payment is not killing your DTI. You can work on lowering the interest rate after you close.

[Scupra]

Thread was started almost a year ago everyone