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raven2k12

Paying off loan in full, then applying for another loan with same lender...

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Does anyone have experience with paying off an unsecured loan within months of receiving it, then requesting new unsecured loan from the same lender soon afterwards?

 

The loan is from USAA and I haven't even had the first payment due date pass yet.  Due date will be in a week or so.  I just got approved with a higher unsecured loan yesterday from lender #2, and they require that I use most of it to pay off the USAA loan, as the "purpose" of the loan is for debt consolidation.  Another chunk will go directly from lender #2 to pay down some cards.  A small remainder will be deposited to my checking account.  

 

I was hoping to have more liquidity, but didn't want to refuse the new loan as it will still help reduce my card utilization.  Anyway, I am considering going back to USAA and requesting a new loan, but don't know how long to wait before approaching them again.  

 

Any input would be appreciated.

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who is lender #2? what are the APRs? Why would you need to reapply with USAA?

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Never get a debt consolidation loan. They will require you to close everything and it will report as debt consolidation and scare off other lenders. Should have done more diligence and gotten loan #2 first before getting the USAA loan. Or go somewhere else where they will give you unsecured without any payoffs. Either way it sounds like you're headed down a slippery slope. 

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USAA will likely code the payoff as “payoff from competitor” so if USAA loan app #2 from them goes through manual underwriting (aka a real person) it will likely get declined. 
 

Also, unless paying down your cards significantly increases your credit score (remember it will need to have more positive impact than the recent inquiry and average age of account the newly obtained loan will have) It’s likely that USAA will still generate the same max loan amount the second time around. 
 

As Shifter said though, it sounds like you could be headed down a dangerous slope with over extending yourself I would proceed with caution and work on a personal budget to get out of debt rather than simply accumulating more.

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Generally, I agree with the foregoing comments.  Most importantly, in your shoes, I wouldn't risk the appearance of "gaming" USAA; they're simply too strong a relationship to risk souring.  Because of the recent "round trip" loan, a new USAA loan app will likely get the scrutiny suggested by gerray.

 

The "slippery slope" alarm seems a tad premature.  However, seeking a new loan for the sake of "liquidity" seems like a good way to add debt that you'll carry long after you've forgotten how you spent the proceeds.  Personally, I would prefer to run up credit cards as needed and rely upon 0% bt's as a financing vehicle, with a pressure to repay such debt as quickly as possible.  Keep installment debt financing reserved for "major" purchases that you can reasonably justify paying off over 2 to 5 years.

 

 

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17 hours ago, raven2k12 said:

Does anyone have experience with paying off an unsecured loan within months of receiving it, then requesting new unsecured loan from the same lender soon afterwards?

 

The loan is from USAA and I haven't even had the first payment due date pass yet.  Due date will be in a week or so.  I just got approved with a higher unsecured loan yesterday from lender #2, and they require that I use most of it to pay off the USAA loan, as the "purpose" of the loan is for debt consolidation.  Another chunk will go directly from lender #2 to pay down some cards.  A small remainder will be deposited to my checking account.  

 

I was hoping to have more liquidity, but didn't want to refuse the new loan as it will still help reduce my card utilization.  Anyway, I am considering going back to USAA and requesting a new loan, but don't know how long to wait before approaching them again.  

 

Any input would be appreciated.

Can you tell me the approximate amount of the unsecured loan?

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On 1/4/2020 at 7:36 AM, raven2k12 said:

Does anyone have experience with paying off an unsecured loan within months of receiving it, then requesting new unsecured loan from the same lender soon afterwards?

 

The loan is from USAA and I haven't even had the first payment due date pass yet.  Due date will be in a week or so.  I just got approved with a higher unsecured loan yesterday from lender #2, and they require that I use most of it to pay off the USAA loan, as the "purpose" of the loan is for debt consolidation.  Another chunk will go directly from lender #2 to pay down some cards.  A small remainder will be deposited to my checking account.  

 

I was hoping to have more liquidity, but didn't want to refuse the new loan as it will still help reduce my card utilization.  Anyway, I am considering going back to USAA and requesting a new loan, but don't know how long to wait before approaching them again.  

 

Any input would be appreciated.

 

Concerns raised by Hegemony and Gerry aside, USAA will not hesitate to extend you another loan as long as your credit has not deteriorated.

 

We take long, extended family vacations every year and borrow between $25k to $35k from USAA every time.  I always select a 5-year term, yet pay the loan back within 30 - 90 days except for a minimal $150 which I let slide for FICO Score benefits.  Many is the time when I still owed them that $150 and took out yet another annual loan with immediate approval.  

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