a new loan

[kaffo]

when applying for a loan, do you think it affects the decision of the lender if you say the loan is for consolidation of existing debts or should you say it's for home improvements ?

[stevie21]

If it's to consolidate other debts then obviously lots of things are taken into account. One thing that may work in your favour is that you will be paying this loan *in place of* other outgoings rather on top of them as you would be with home improvements.

[gordy_b]

To be honest, while the other answers are not inaccurate, if you have substantial enough income to cover the new loan and the others, consider telling them it's for home improvements.  Bear in mind that you are dealing with computerised scoring systems, not human beings and computers have no sympathy!

Every lender is different, but the one I work for gives you ZERO credit scoring points if the loan is for consolidation, and looks more favourably on loans that would increase the value of property i.e. home improvements - so yes, the loan purpose has a bearing on the decision.  At the end of the day you would be asking the bank to take on debts already owed to other banks/financial institutions.

Beware also of the fact you may have to provide settlement statements from the other loan companies which can be seriously time consuming.  If the statements were to show missed payments or arrears then your initial "accept" decision could change.  Nowadays the need to get 3 quotes for your home improvement is more or less gone!