Completely new to Loans/Credit Cards, Whats best for me?

gigabyt3r

Hi, I'm Completely new to the world of loans and credits cards, never had either one of them before! I'm looking to purchase a car for around the £5k mark. I was wondering what would be the best (best meaning cheapest) way of me doing this?

Many thanks in advance

21 Years old in a few month if it helps :beer:

gigabyt3r

Bump

Tixy

Hi giga

Now technically the cheapest way would be to save up for it first or to buy a cheaper car but I'm guessing thats not the type of advice you came for.

Do you have any credit accounts at all? A mobile phone contract? catalogues? anything?

If you have no credit history at all you are going to find it hard to borrow that kind of money from any prime lender. If this is the case you could contact your own bank (providing you have kept your account well).

If not you may need to read this article on building a credit history. http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve

If you do already have some credit accounts and have managed them well then you may get a loan or credit card. Ideally a 0% credit card would be cheapest but again you will probably struggle to get a £5k limit.

How are you intending to buy? If you are buying privately you will need the money in your account so in that case for a credit card you would need to look for a super balance transfer card which allows you to transfer to your current account, which you can then spend (most cards only allow transfers to other cards).

You may be best looking for a low APR loan -how much can you afford to repay each month? (don't forget to factor in all the running costs of the car when working out how much you will have available for repayments;)). Remember most loans quote a typical APR and you could end up paying much higher - don't agree to the loan (or to buying a car) until you are sure how much it will cost in repayments.