In this brief guide, we are going to answer the question “how soon after buying a house can I get a personal loan?”.

How soon after buying a house can I get a personal loan?

If you are wondering how soon after buying a house you can get a personal loan then the first thing you should know is that there is no restriction on how soon or what timelines you must follow.

You may want to wait 6 months after buying a house with a mortgage before applying for a personal loan.

This will give you the opportunity to build 6 months worth of good credit repayment behaviour on your mortgage before applying for a personal loan and will allow your credit score to build itself back up after any it may have taken from the hard credit search conducted when you took out a mortgage application.

You will be able to get a personal loan immediately after you have got a mortgage but there are a few things you should consider.

These factors may affect how much you can borrow and the personal loan rates you may be able to obtain.

What are personal loans?

personal loans are none secured loans which you take to fund anything you desire. Due to the fact that these loans are unsecured, they tend to be much more expensive than other forms of credit but defaulting on these loans could mean that you end up losing some of your possessions through county court judgements and bailiff enforcement actions.

That means that although these loans are not secure they do carry a  risk which you should be aware of.

Your personal loan options may be limited

If you bought your house with a mortgage then it is very likely that the mortgage lender performed a hard credit search on you when deciding on if to give you the mortgage or not.

This hard credit search is visible to others and it can reduce your credit score as well as make it much harder for you to get credit in the immediate future afterwards.

This is especially the case if you do not go through manual underwriting but rather go through automated decision underwriting which may reject you if they spot a recent hard credit search on your credit profile. 

You may, therefore, find it in your best interest to seek a personal loan lender who is willing to manually underwrite your application.

You should also look to take steps which increase your credit score in the meantime, these include:

  • Keep your credit utilization below 30%
  • Avoid missing credit repayments
  • Avoid making too many credit applications in a short time
  • Get a credit builder card or loan(such as Loqbox) to show good credit repayment behaviour
  • Avoid payday loans
  • Get on the electoral roll
  • Keep your active credit accounts open for as long as possible

Your debt to income ratio

As with mortgage applications, the personal loan lender will look at your debt to income ratio to be sure that you do not have too much debt. 

They will also check to see what your disposable income is and if you can afford the personal loan repayments as well as what your debt to income ration will including the personal loan repayments.

If you fall above their debt to income ratio cap then it is very unlikely they will offer you a personal loan.

Use a credit eligibility checker

You may want to consider using a credit eligibility checker which will be able to search for a loan for you amongst various providers without affecting your credit score and give you decisions such as preapproved or the percentile to which they think your personal loan application will succeed.

In this brief guide, we answered the question “how soon after buying a house can I get a personal loan?”.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.