Yes, but there’s a strong possibility it will affect your future home loan application. That said, the impact could be both positive and negative. Let’s say you’re close to paying off a personal loan with no late payments. This will prove you can manage your money and put your ability to pay off a home loan in a favourable light. But if you’re in the early stages of a loan, the repayments will count as an expense, which is likely to reduce your borrowing power. The lender may even add a buffer to allow for rising interest rates if your loan has variable interest. Most personal loans are unsecured, which means there’s additional risk to the lender if you can’t meet the repayments. And if you’ve missed any payments when you apply, the lender will see it as a red flag. For people with a bad credit rating, nominating a guarantor could improve your chances of securing a home loan. Nominating a guarantor has risk associated for the guarantor, so we encourage you and the guarantor to review all risks associated before taking out such a loan. And if you’re interested in finding or refinancing a home loan, our team of specialists would be happy to help. Fill out our home loans enquiry form or call us on 1300 190 429.