Top Up Loans

Initially, a top up loan involves a soft search which allows you to find out the cost of borrowing and compare your options before committing to a hard search. A soft search won’t affect your credit score. We’ll just review the information you’ve provided and take a look over your credit report to help us check your eligibility and decide what interest rate we’ll be able to offer you.

If you do decide to go ahead, though, a top up loan involves the same checks as a new loan. This means applying for a top up loan will involve a hard credit check which may have a short-term impact on your credit score.

If you go ahead and take out a top up loan, this will appear on your credit report as a new loan and your existing loan will be marked as settled. If you take out an additional loan, both your new and existing loan will show on your credit report. It’s also worth noting that any additional borrowing will affect your debt-to-income ratio, which could have an impact on the amount you’re able to borrow in the future until you pay off some of your existing debts.

Any changes to your credit report will likely have an impact on your score. Though, ultimately, it’s how you manage your debt that will have the biggest difference. Our guide on how personal loans impact your credit score tells you more.

Some of the benefits of a top up loan are:

• Find out how much a top up loan could cost with no impact on your credit score
• You could borrow the extra money you need quickly. In most cases, we’ll be able to give you an instant decision.
• You may have a higher chance of acceptance when you’re invited to apply for a top up loan with us, as we’ll know the loan amount you currently have will be settled.
• It gives you an opportunity to agree on new terms, such as how long you borrow money for. This could be beneficial if your circumstances have changed since taking out your original loan.
• Your repayments will always be fixed, so the amount you pay each month won’t change. This can help you to stay on top of your finances.
• Choose your repayment date in the app or your online account. This is particularly handy if you choose to take out a second loan, as you can choose for both loan repayments to be made on the same day each month.
• It’s simple to repay your loan, in part or in full, at any time.

The main disadvantage of a top up loan is it will increase your overall debt (and most likely increase your monthly payments too) so you must be sure you can comfortably afford the new repayments.

You may wish to extend the loan term to bring your repayments down, though be aware that you could end up paying more interest in total this way. This also means you’ll be increasing the amount of time you have a loan with us.

You will have a 14-day Right to Withdraw period, during which time you’ll be able to withdraw your top up or additional loan agreement. However, if you do decide to cancel your loan, you won’t be able to get your original one back and you will need to repay the full balance within 30 days (which includes the original loan amount plus any additional borrowing). If you decide to cancel your agreement after the cooling off period, you will need to settle your loan in full and up to 58 days’ interest will be payable.

Remember, you also have the option to make unlimited free overpayments on Novuna personal loans. So if you find yourself in a position to repay an additional amount early, you’ll be able to do so on the app or online.