Personal Loan Application with $40K of Clear Credit Cards

umonroe on 21/08/2024 - 17:03
Last edited 21/08/2024 - 18:12 by 1 other user

I recently (stupidly) signed up for a Bank of Queensland Credit Card to churn points.

They set the limit to $30K. I also have an existing Heritage CC with a $10K limit that I use day to day and clear monthly. The plan is/was to use the BoQ CC to spend $4.5K and get the points then close it. However, I now need to get a Personal Loan of $20K to finish a renovation project. Should I or do I need to close the BoQ CC in order to be successful for the Personal Loan application?

We have a combined income of $210K+ and no other loans/debt apart from $400K mortgage.

Financial Loan

Comments

  • JIMB0 on 21/08/2024 - 17:21
    +7

    Never let them set the limit when opening a credit card. Always put in the lowest they allow.

    • umonroe on 21/08/2024 - 17:40

      Thanks, I will remember for next. I wasn't thinking straight when I applied.

      • Browsers on 21/08/2024 - 19:28
        +2

        You can call BOQ and lower the limit on your existing card, should be effective immediately provided the new limit is still higher than your current outstanding balance. The lowest limit for their Platinum card is $6k.

  • brendanm on 21/08/2024 - 17:24
    +4

    Combined income of $210k+, but you need a personal loan for $20k?

    • umonroe on 21/08/2024 - 17:44
      +1

      Yeh fair call, we did save for 90% of project but would like to finish and enjoy it rather than continue living with it incomplete. Also doing alot of it myself to save costs.

  • Goodproduction on 21/08/2024 - 17:29
    +1

    No worries, bro. getting a $20k personal loan is damn easy through any broker. I snagged $23k even though our mortgage is almost double yours, with a $230k annual income.
    My personal loan interest sits at about 10%

    • umonroe on 21/08/2024 - 17:39

      Thanks mate, was looking for a response like this. I spoke with a mortgage broker about a year ago when I was churning points of an ANZ CC with $30K limit and he suggested that I close it if I was going to go for a loan, however that was a mortgage not a personal loan. I would really prefer to not get rejected as I assume that is a mark on my credit score.

  • Demux on 21/08/2024 - 18:03
    +1

    Have you checked if you can draw the money out from your home loan instead?

    • umonroe on 21/08/2024 - 19:40
      +1

      Yes I had then drifted away from the idea as it wasn't enough, but yeh this seems the smartest. Thank you for the clarity. I think I could use this plus CC for some of the materials to avoid getting a loan altogether. I've been pondering for a few days but my wife is started to lose patience. :/ Really appreciate your input.

  • SBOB on 21/08/2024 - 18:10

    I hope you're getting a loan with no penalties for early pay out and minimal fees.

    A $20k loan with a high interest rate on that salary should be paid off in single digit months, not years (especially with no other loans/debt apart from $400K mortgage, though i would redraw from mortgage before taking out seperate higher interest personal loan)

    • umonroe on 21/08/2024 - 19:43
      +1

      Yes was looking at Heritage for Loan with this:

      Fixed repayments to make budgeting easy
      Make unlimited additional repayments
      Pay out at any time with no penalty
      Redraw your additional repayments online at any time
      Loan terms from 1 to 7 years
      Loans from $5,000 to $50,000
      Pay weekly, fortnightly or monthly

      Thanks for the kick up the arse, I agree. Should be able to tighten belt and do it. I started thinking two years for the loan like a crazy person, (~$1900 in interest all up for 25K) but really you are correct. I hate having debt.

  • Ocker on 21/08/2024 - 18:24

    Make a cash drawdown of 20k on your BOQ card for your reno's. Then open another card and transfer the BOQ balance to that card on interest free terms for a few years.

    • umonroe on 21/08/2024 - 19:37

      The thought had definitely crossed my mind, however I wasn't sure that the next CC + balance transfer would get approved, based on my concern already, and then I would be paying 20+% interest on the cash. I suppose I am being fairly risk adverse, the banks used to give money to anyone, not sure if that has tightened up lately? I wonder how much possible debt, cc, loans etc can I get into given my income before a lender says no?

      • Baysew on 21/08/2024 - 19:59

        I wonder how much possible debt, cc, loans etc can I get into given my income before a lender says no?

        Debt up to your neck, but not over your head.

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