Loan for new car -

badger007

Hello,

I've been trying to borrow around £8000 for a new car.

My experian credit rating rates me at very poor, due to having missed several payments on a credit card while a student and during an period of redundany.

I have also been denied 2 joint mortgage requests with my mum as I was trying to help her out when she was having some financial problems approx a year ago.

I've not missed any recent payments and am in full time employment earning £25k p/a

I have been at the same address for 7 years and am on the electoral role.

RBS and zopa have both turned me down.

Carloans4u found me a lender, providing the car I wanted was over £12,000 but I don't want to spend this much.

Would I have a better chance of applying for a graduate loan from RBS than a "standard" personal loan, I still have my student account with them (had for 5 years)?

Who else would be a suitable option?

Any advice is appreciated

bryanbukowski

As you have been turned down by lenders recently, I would advise you to only approach company's who you have a history with, ie your bank.
Graduate deals are usually quite good so if you can take advantage of this then do!
Otherwise, 'Highstreet' lenders with a competitive APR will probably turn you down as you've been turned down by Zopa & RBS.

B

CLAPTON

with a poor credit rating you are unlikely to get a loan form a mainstream lender with some security so you might consider HP.. you will probably pay a fairly high APR.

Why do you need to spend 8k on a car? lots of decent cars available for a couple of thousand

nick.evans

Badger,

I'm in the same boat as you, not everyone wants an old car for 2k, me included. I've found my only ooption is to go to a garage with a couple of grand, try and find above the 10% deposit and they will act as a broker. Rates will be fairly high, but i got offered 22.5% and thats with 2 defaults albeit satisfied 3.5 years ago. And really with that on my record no one should be offering me credit unless 75% up apr

evherkes

I feel your pain, I'm also the same. Many garages (eg Vauxhall) ask for a guarantor to be put on and the finance people often compete with highstreet APR rates if you or the policy holder are a homeowner!

bouncydog1

I'm afraid that I am with Clapton on this one - £8k is a third of a year's salary - why do you "need" to spend that much on a car. You are going to pay an extortionate rate of interest, frontloaded making the initial loan much higher than £8k.

You are then going to have to spend the next 4 or 5 years paying this off while the value of your asset depreciates considerably. Add to that running costs, including insurance, servicing, fuel, the odd repair bill or two that is not covered under the warranty (assuming that this is not a brand new car) and this is going to be a millstone around your neck before you know it.

I do understand the attraction of a smart car - my last 4 cars have either been brand new or under 6 months old, but the difference is that we have financially been able to afford them either paying cash or on low rate interest.

You already have a poor credit rating - don't make it any worse by over burdening yourself with costly financing. Work instead on building up your credit history - a loan of £8k is going to eat up quite a lot of your monthly budget - you could start setting aside the cost of the car loan each month and see what a savings pot you have in 12 months - you will also be able to realistically appreciate what it is going to cost you.