Personal loans and confusing criteria

[striper]

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@Revelate wrote:

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@striper wrote:

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@DaveInAZ wrote:

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@striper wrote:

That makes sense.  On the Sofi loan, I should have spoken to a representative and told them my intention was to pay off the existing personal loan.

Ive only had one hard pull, and that was for the final stage of the Sofi loan application. 

I do have a fear that soft pulls are in fact visible to other lenders.

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If you speak with a rep of any of the personal loan companies I would think they can make a condition of approval of a new loan contingent on paying off the Lending Club loan, they payoff the LC loan directly before releasing the rest of the funds to you.

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That would be a good idea.

I think the lending companies are nervous about lending to people who already have personal loans.  It's probably a flag when people take out personal loans.

On at least one of the applications, they ask if you have taken out a personal loan in the last 3 months.

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You may be right in general, but more likely the pink highlight is simply it can take up to 3 months for an account to be reported to the bureaus, so basically this is a check for loans that might not be reported yet which would change the underwriting assuredly as you state.

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Good point.  With one of my personal loans, it took 2-3+ months before it hit the report.

Im wondering if on my 2nd personal loan application, the first one was not visible in the report and that's why I received such a quick and easy approval.

[striper]

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@Appleman wrote:

What is your DTI with your current credit profile?

Congrats on the better FICO scores.

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Ive never calculated my DTI so Ive been looking around for how to get it.

My questions about DTI is what to include in the montly obligations/payments.

I calculated a DTI of 25% but not sure if I need to be including things like auto insurance, cell phones/utilities, and other expenses.

[iced]

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@striper wrote:

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@Appleman wrote:

What is your DTI with your current credit profile?

Congrats on the better FICO scores.

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Ive never calculated my DTI so Ive been looking around for how to get it.

My questions about DTI is what to include in the montly obligations/payments.

I calculated a DTI of 25% but not sure if I need to be including things like auto insurance, cell phones/utilities, and other expenses.

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While lenders typically only look at true obligations (credit card payments, loan payments, rent, and such) in their DTI calculations, I would strongly urge you to consider ALL recurring monthly debt in your DTI calculation. Banks will almost always approve you for more than you can really afford, so it's up to you to police yourself and make sure you only bite off enough that you can chew.

I include utilities, mortgage, car payment, insurances, gym membership, commuter rail passes, 401k contributions, or anything else I pay for on a regular basis that I would like to keep having. If it's something I don't want to give up or do without, why would I allow my income without those things to be factored into my affordability?

[DaveInAZ]

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@DaveInAZ wrote:

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@striper wrote:

That makes sense.  On the Sofi loan, I should have spoken to a representative and told them my intention was to pay off the existing personal loan.

Ive only had one hard pull, and that was for the final stage of the Sofi loan application. 

I do have a fear that soft pulls are in fact visible to other lenders.

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If you speak with a rep of any of the personal loan companies I would think they can make a condition of approval of a new loan contingent on paying off the Lending Club loan, they payoff the LC loan directly before releasing the rest of the funds to you.

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And they may very well offer you a lower rate if you tell them a good part of the loan is to payoff Lending Club. The personal loan market is super competitive and they would love to "steal" a loan from Lending Club,

I'm having the opposite problem, I've been getting 2-3 offers per week from personal loan companies, so last month I signed up for prescreenoptput to stop the CRAs from selling my info & hopefully stop the offers I have to shred. I'm carrying around $6k in CC balances and have a paid in ful Propser loan from a couple years ago, so they think I'm a super prime target. What they can't see is that the CC balances are either pay in full monthly usage or 0% BTs or intro promo, so no, I'm not borrowing at 10-12% to pay off CC balances that I don't pay a penny in interest on.

[striper]

The only reason that makes sense to me is that maybe the personal loan lenders have become more selective.

By nearly all measures, my credit report looks better than the last time I was accepted. With the exception of the increased debt caused by the personl loan.

[DeeBee78]

I think your biggest issue (that I didn't see addressed here) is that you've only had the $23,000 loan for 8 months. Personal loans in general are very difficult to refinance, as you've already found out.

My guess (and I could be wrong, so please correct me if so) is that you probably have not brought the loan balance down much from it's original amount. 

On a 36 month term, you probably have a balance of $19K right now. 

On a 48 month term, you probably have a balance of $20K right now. 

And so on and so on...

I will bet once you get the balance owed down to $12-15K, you'll qualify for a decent refi offer. Until then, a friendly local credit union staffed with humans might be a good bet.