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    • StevenB12
    • By StevenB12 5th Nov 17, 4:00 PM
    • 37Posts
    • 4Thanks
    StevenB12
    Need some loan advice, please
    • #1
    • 5th Nov 17, 4:00 PM
    Need some loan advice, please 5th Nov 17 at 4:00 PM
    Hey everyone

    About 2 years ago I got a loan for 7.5K, paying back 247 a month which has 2 years left to run more or less (2020).

    As the usual happens things come up and circumstances change, basically in a year I'm going to be going for a mortgage, also need a new car etc. Was looking at a loan for about 18K, luckily my credit score is good so I got some good offers for monthly payments, about 340 a month. My current loan want 6K settlement figure, is it worth getting a bigger loan, paying off my current loan?

    Ive spoken to a mortgage advisor and my current loan wasn't impacting on any forthcoming mortgage, but obviously taking on two loans at a time will, hence this is why I don't want to be looking at a car on finance..

    Any advice is greatly appreciated, thank you
Page 2
    • StevenB12
    • By StevenB12 6th Nov 17, 1:05 PM
    • 37 Posts
    • 4 Thanks
    StevenB12
    They've got the guarantee that I'll be paying off the other loan as I have to do it on then phone from Lloyd's in advisors office haha. No as said with the mortgage the way the broker went over it with me it's lot the overall level of the loan that gets looked at its just your monthly affordability for the mortgage it's self and bills. They rent looking at it as being 18K , they're looking at it as 400 or so a month rather than an overall fee, hence with it being a joint mortgage the overall costs so far on about £1100 for mortgage and bills, leaving about 800 or so a month spare since its a joint application , that's why he explained that they look at monthly affordability and not the actual sum of the loan, obviously I'm assuming there will be exceptions for larger loans that's why most are capped at the 25K Mark
    • Candyapple
    • By Candyapple 6th Nov 17, 1:19 PM
    • 2,485 Posts
    • 1,854 Thanks
    Candyapple
    So if you are happy with the amount you will be paying back, you have found a bank willing to lend you the full amount you wanted and your mortgage broker has told you that it won't affect the amount you will be offered - am I missing something here, why haven't you applied for it yet?
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • Herzlos
    • By Herzlos 6th Nov 17, 2:22 PM
    • 5,993 Posts
    • 5,444 Thanks
    Herzlos
    my current car has poor mpg as all this was bought and done before job change etc , any car I get now I'm looking at paying more as I want a newer car that's going to last a good 7/8 year at least .
    Originally posted by StevenB12
    What mpg do you get? How many miles are you doing?

    You can get a newer car with better mpg for much less than the £12k left over. Honestly, if you spent a third or half of that, you'll still likely get 7/8 miles out of it (and for the money, even if you only got 4 years out of it you'd still be better off).
    • StopIt
    • By StopIt 6th Nov 17, 2:29 PM
    • 1,392 Posts
    • 1,184 Thanks
    StopIt
    They've got the guarantee that I'll be paying off the other loan as I have to do it on then phone from Lloyd's in advisors office haha. No as said with the mortgage the way the broker went over it with me it's lot the overall level of the loan that gets looked at its just your monthly affordability for the mortgage it's self and bills. They rent looking at it as being 18K , they're looking at it as 400 or so a month rather than an overall fee, hence with it being a joint mortgage the overall costs so far on about £1100 for mortgage and bills, leaving about 800 or so a month spare since its a joint application , that's why he explained that they look at monthly affordability and not the actual sum of the loan, obviously I'm assuming there will be exceptions for larger loans that's why most are capped at the 25K Mark
    Originally posted by StevenB12

    Get a new broker, right now.


    If you have an £18,000 loan, it'll be offset against any deposit you have when it comes to your deposit.


    Basically, lenders vary but it looks like this.


    Deposit: £11,000
    Debt: £18,000
    Net Cash: -£7,000


    Result: No actual deposit saved because you effectively borrowed the sum. Mortgage declined.


    A good broker will tell you this. You have a bad broker.
    • StevenB12
    • By StevenB12 7th Nov 17, 4:02 PM
    • 37 Posts
    • 4 Thanks
    StevenB12
    Having spoke to 3 different mortgage advisors now (Lloyds , Natwest , TSB) all 3 have said that any loan taking out will not be viewed as a total sum/figure when it comes to a deposit. It comes down to your monthly expenditure and what you can afford per month in terms of a mortgage/bills.

    The one at TSB basically said you could have 20 different loans out, if you can afford to pay them back, pay a mortgage and bills, and still have enough to live on, then there's no problems as far as he was concerned anyway.
    • StevenB12
    • By StevenB12 7th Nov 17, 4:04 PM
    • 37 Posts
    • 4 Thanks
    StevenB12
    I get about 25/29 MPG now, on average I do about 180/200 miles per week.

    Tried in the past buying a cheap car for just work purposes but didn't work out, was always paying more out on repairs etc.
    • StevenB12
    • By StevenB12 7th Nov 17, 4:06 PM
    • 37 Posts
    • 4 Thanks
    StevenB12
    As the first post I put on suggested, was paying back a loan with a loan a viable option etc. Having the means to do it doesn't always mean it's a good idea, hence why I was looking for advice or if anyone else had been in a similar situation, that's why I haven't gone ahead with it yet to gather in what people are saying or if they have had something similar.
    • Sncjw
    • By Sncjw 8th Nov 17, 8:40 AM
    • 1,474 Posts
    • 876 Thanks
    Sncjw
    So you will be borrowing 24k on a 21k salary. Part of the 18k won’t be garunteed to be spent on the loan. The banks will see the 6k you currently have as extra on top of the 18k
    • tykesi
    • By tykesi 8th Nov 17, 8:46 AM
    • 1,831 Posts
    • 2,542 Thanks
    tykesi
    I get about 25/29 MPG now, on average I do about 180/200 miles per week.

    Tried in the past buying a cheap car for just work purposes but didn't work out, was always paying more out on repairs etc.
    Originally posted by StevenB12
    Don't expensive cars ever need repairs?? I didn't realise the reliability was directly proportional to the cost of the vehicle.

    Or maybe you just chose the wrong car?
    £2017 in 2017 - £5396.83
    • Herzlos
    • By Herzlos 8th Nov 17, 9:25 AM
    • 5,993 Posts
    • 5,444 Thanks
    Herzlos
    I get about 25/29 MPG now, on average I do about 180/200 miles per week.
    Originally posted by StevenB12
    That'll certainly hurt a bit. But does it make sense to spend £12k on a car to save maybe £25/week on fuel?

    Tried in the past buying a cheap car for just work purposes but didn't work out, was always paying more out on repairs etc.
    It depends how cheap you go. A car for £1000 will probably need some repairs, a car for £4000 may need some, and a car at £12 is probably OK. However, all cars require upkeep and the cost of repairs is often less than the cost of the more expensive car (repayments and depreciation).
    • enthusiasticsaver
    • By enthusiasticsaver 8th Nov 17, 11:57 AM
    • 4,680 Posts
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    enthusiasticsaver
    I am another one who would urge caution in taking out a large loan (£18k is huge) just as you are applying for a mortgage on what is a very average salary. If interest rates rise as they have started to you could very soon end up in financial difficulties. Banks will take existing loans into consideration when it gets to underwriting stage for mortgages. It depends of course on what your girlfriend earns as to how much total they will give you. If she earns a similar amount to you then £120 sounds affordable but until you know exactly how much you will need it seems a very high loan payment to be making on top of mortgage and bills. Can you not go for a cheaper car?

    Whether you consolidate loans or not depends on interest rates they will give you. Do not forget headline rates are offered to very few and usually only to the very highest scoring creditors. The less affordable they judge the loan to be the higher the interest rate which seems crazy. Whatever you bought for £7.5k 2 years ago has cost you almost £4k more. Don't make the same mistake again. Borrowing should ideally be done on 0% money transfer or credit cards and paid off within the deal period.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Candyapple
    • By Candyapple 8th Nov 17, 12:33 PM
    • 2,485 Posts
    • 1,854 Thanks
    Candyapple
    Do you know what rate APR Lloyds are willing to offer you this £18k loan?
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • Kidder81
    • By Kidder81 9th Nov 17, 10:50 AM
    • 60 Posts
    • 59 Thanks
    Kidder81
    And I thought the days of irresponsible lending were over!

    If its advice you're looking for, mine is to replace your current car for one of similar or less value that is more economical (I've often run 10-15 year old cars with no major repair bills needed). Buy a Japanese or old German car, in my experience as about as reliable as you'll get.

    Focus on paying off your current loan asap with your monthly surplus. Once that is done, save it towards your house deposit.

    When you're ready, approach your mortgage broker from a much healthier financial position.

    Or you could spend 12k on a new car and not follow my advice.
    • Ellie777
    • By Ellie777 9th Nov 17, 11:13 AM
    • 3 Posts
    • 0 Thanks
    Ellie777
    My advice would be to go for a cheaper car!
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