First time personal loan questions

Hryszko · 7 August 2017 at 9:08AM

Hi all,

First post on here because I was told it was the place to go if you want some really solid money advice.

I currently lease a little Polo GTi for £170 per month & I am coming towards the end of my agreed contract term, I have looked at getting a personal loan for the amount of between 12-13k to be able to buy the car I want (big petrolhead). The monthly payments come out at around £220 which is great because I can 100% afford that.

I have never had a personal loan before and because the APR% is much lower than getting a car on finance I thought it would be the sensible way to go. The questions I have are..

1. If you get a personal loan and buy a car with it, if someone was to HPI check the car does it come back as completely clear? Or that the loan is attached to the car.

2. How likely am I to be accepted on a personal loan for that amount? Bare in mind I have never missed a payment in my life, my credit score has always been well above average. Me and my partner have just bought a house so it has dropped down a bit but it is still good.

3. What is the process of applying for one, can you apply in principle to see if you would get accepted on it?

My dilemma is that I have to give my Polo back in roughly a month/month and a half.
Any help is greatly appreciated!! :money:

Caz3121 · 7 August 2017 at 9:20AM

Hryszko wrote: »

The monthly payments come out at around £220 which is great because I can 100% afford that.

I have never had a personal loan before and because the APR% is much lower than getting a car on finance

I assume you are looking at the Representative rate being advertised when calculating
There is no guarantee that you will get offered this APR (especially if first loan) so the rate may be much higher. You will not know whether you will be accepted and at what rate until you apply. (there have been people applying for 3% that get offered at over 10%)

Hryszko · 7 August 2017 at 10:25AM

Ahh okay that makes sense..

So what is the best way of doing it, applying and seeing what they offer?

Don't want to be paying 10% interest, no chance.

KoshB5 · 7 August 2017 at 10:56AM

Using a loan comparison site that does a soft credit check on you will give you an indication of probability of success of an application only. Remember though that until you apply and a lender applies all their credit risk and affordability checks (based on their business model) you will not know if your are successful or what the APR will be. Car fiance affordability is less rigorous as the car is the security compared to an unsecured loan but as you've seen their APRs are normally higher.

~Beanie~ · 7 August 2017 at 10:58AM

Hryszko wrote: »

1. If you get a personal loan and buy a car with it, if someone was to HPI check the car does it come back as completely clear? Or that the loan is attached to the car.

A personal loan is not attached to the car so it won't show up on an HPI check.

Hryszko · 7 August 2017 at 11:05AM

I did a eligibility comparison quote and did a soft quote on the one that came up at 95% chance of getting it...

Came out at 10% apr which is way too high.

May have to look at purely financing the car in question which I don't want to do. So doing a soft quote doesn't affect credit score?

DCFC79 · 7 August 2017 at 11:22AM

Hryszko wrote: »

I did a eligibility comparison quote and did a soft quote on the one that came up at 95% chance of getting it...

Came out at 10% apr which is way too high.

May have to look at purely financing the car in question which I don't want to do. So doing a soft quote doesn't affect credit score?

Correct a soft quote doesn't show on your credit file.

Remember only you can see your score, lenders see your credit history.

Hryszko · 7 August 2017 at 11:38AM

The thing is I don't actually understand why my credit score has dropped slightly..

I have always had amazing credit score, never missed a payment in my life! I think it's dropped because of the recent house purchase (lenders searching etc)

So my credit history should still be really good?

DCFC79 · 7 August 2017 at 11:44AM

Hryszko wrote: »

The thing is I don't actually understand why my credit score has dropped slightly..

I have always had amazing credit score, never missed a payment in my life! I think it's dropped because of the recent house purchase (lenders searching etc)

So my credit history should still be really good?

Well whats on your credit history, any defaults etc ? Do you have all green ticks or is it a mix of red crosses and green ticks ?

Yes its possibly due to the house purchase (congrats for the purchase).

It drops when there's a change eg a mortgage.

Hryszko · 7 August 2017 at 12:39PM

No defaults, no missed payments etc.

I have just paid off a PayPal credit agreement which I have had for about 2 months (£1400 which was for a Macbook Pro)
Paid that off on Friday so might have just not updated since, my score is just under 600 (598 i believe)

Thanks on the congrats, hopefully be in the house in a week!

Candyapple · 7 August 2017 at 1:07PM

Hryszko wrote: »

No defaults, no missed payments etc.

I have just paid off a PayPal credit agreement which I have had for about 2 months (£1400 which was for a Macbook Pro)
Paid that off on Friday so might have just not updated since, my score is just under 600 (598 i believe)

Thanks on the congrats, hopefully be in the house in a week!

You do realise your score is meaningless right?

Also, who is this 598 / 600 score with? Experian max score is 999, Call Credit is 710 and Equifax is 700.

If you have just paid off a debt it may take 2-3 months to update and be reflected in your credit files, same as if you've just taken out a mortgage your credit history is going to drop because of the new borrowing and also a change of address.

First time personal loan questions

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