Loan rates.

Eck

Hi there, my son is wanting a small loan of approx £3k to fund the purchase of a second hand car, he is fully employed earning approx £12k per annum, he is only 19 years of age, my question is this, how does a youngster go about getting a loan at a reasonable rate without being ripped off?
I could easily loan him the money, but he wants to be independent and do it on his own ( which i think is a good idea anyway) anyone know of any loans that are available for first time borrowers that isn't too high too repay?


Thanks

Cara79

Hi there

I can appreciate that your son wants to be independent, but I have an idea which my parents have done with both myself and my brother.

How about you lend him the money, but he pays you interest, although not the astronomical amount he would be charged by a loan company/bank.

It's just an idea. Then you get a small return on your money, your son isn't being ripped off, yet he's not had a loan with a company.

Up to you, but it worked for us.

Cx

Eck

Thx cara,


I've thought about that, but i still think it would be better if he could get one himself, it kind of makes him pay it back, if you know what i mean....lol

grumbler

• You mutually agree the interest rate and the term, for example, 6% and 2 years.
• You use http://www.whatsthecost.com/loan.aspx to calculate monthly payments.
• Your son sets up a standing order to make monthly payments to you (£133 for the above example).

This is simple and very similar to a real loan with a real company. 6% is a good rate for both of you.

Eck

Thx for that, i already had that type of scenario in mind, i just wondered what the cheapest loan available would be for his circumstances.

grumbler

You can try Moneysupermarket* (the link in the blue box above). Unfortunately their search doesn't work for me now. I think 10% is very optimistic figure for 19 y.o. without credit history and living with parents.