Young Person Trying to get Loan

paulmorrison

Hi there, wondering if any of you guys can help me..

I'm 18 years old, and a 2nd Year Electrical Apprentice.
I am looking to buy a car very soon, which has the value of 8500.
I have a 800 deposit, and have been looking to pay with finance, or a bank loan.
Obviously being young..this makes it very difficult to get a bank loan, and the finance rates are ridiculous! I have tried to get bank loans from many places such as 'Tesco, Nationwide, Sainsburys' however each one has declined my application! And paying for a car with finance, i end up paying more than £2000 over 2 years!

Can anyone offer me any advice on how to keep the costs down, i need a car very soon! And i need a newish one, not below the value of about 6000!

Any replies would be superb :beer:

epsilondraconis

The obvious response is, why do you need a car with the value of £8500?

The best bet would have been to approach your bank first - i.e. the one where your money gets paid as they may have looked on you more favourably.

The problem is that you are extremely unlikely to get the loan now because each time you apply for a loan, it is noted on your credit file. If you make lots of applications within a short space of time (as you have done), it makes you look desperate and therefore its even less likely that a lender will give you the money.

It may be worth you checking your credit file before you do anything else and leaving it 6 months before reapplying for any form of credit.

Edit: I suggest taking a look at this:

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

In addition to the page being very useful, the webpage also contains a link showing how you can get a copy fo your credit file for free.

CLAPTON

how much do you earn?

paulmorrison

CLAPTON wrote: »

how much do you earn?

i earn 12600 a year.

2nd year wages : £7 an hour, £225 a week, more than enough to afford the paybacks!

CLAPTON

indeed

more than enough to save up for things you want.
save first then spend; it's that simple

Borrowing 8500 over 3 years would probably cost you about 300 per month and
remember you will need to buy insurance, car tax and maintain the car.
Probably cost you half your take home income


However, its extremely unlikely any main stream leaner will lend you the money as its far too high a proportion of your income

lea_t88

I don't know loads but its very unlikely you will get a loan for that amount, because of the large number of applications you have made recently. Try going to your main bank and having a chat with them, you may get one for a smaller amount.

And if you are desperate then you can get a pretty decent car for about £1,000 that will get you from A to B.

yorkshire-lad

i took a loan out when i was 2months shy of turning 19. i was earning over £14k, and i had no choice but to have someone as gurantor, and even then they interest was quite high.

and now, 3 years down the line, i am regretting taking the loan out, i wish i had just saved up:(.

i think 8500 is alot of brass for your first/second car and for your age.

back to your question, car finance would be the one who offered you the money, but if you have already tried several places ie Tesco, Nationwide, Sainsburys then these are applications will show on your credit file, lots of credit searchs+short period of time=not good.

my personal advice would be to save up a little:)

good luck
YL

RobertoMoir

paulmorrison wrote: »

i earn 12600 a year.

2nd year wages : £7 an hour, £225 a week, more than enough to afford the paybacks!

You need to get into the real world. You're looking to borrow far too high a proportion of your wages with no credit history to buy what will probably be either/and a very new or very high spec car at that price, which will cost you a fortune to run.

I'm considerable older than you, earn considerably more than you and have a lot more insurance history / no claims bonus than you and while I could afford to get a car loan for £8500 it would still cost far more of my monthly wage packet than I'd feel comfortable giving up right now.

FATBALLZ

Good idea. If you buy an expensive car you will look the biz when you turn up at the office and are bound to get a promotion. Cars are an excellent investment. Guy I know works as a handyman in a local hospital on NMW. Used to walk around changing lightbulbs. He bought a £20k car and they were so impressed they made him executive of loo roll replacement.

bouncydog1

Hi Paul

Don't get a loan - o.k. you earn £225 a week - have you costed out your insurance, running costs on the car (tax, fuel (which is increasing), service costs etc). At 18 your insurance for fully comp (which you have to have if your car is costing £8,500 in case you have an accident to protect your investment) is probably going to be at least £1200 per year - that leaves you with £200 per week less the car repayments etc mentioned above. If you are unfortunate enough to bash your new car (and have to pay the first £500 or so excess) and lose any bonus you might have then it's going to cost you more and become a millstone around your neck.

What about going out with your mates at the weekend or saving up for a lad's holiday - it's all very well taking out a loan if your current circumstances mean that you don't do anything other than stay home and admire your car, but over the next few years (while the loan is running) your circumstances are likely to change if you are the same as most 18 year olds.

And in four years time whilst you are still paying for your car and having little money, it will be worth very little. Far better to show a mature attitude and buy what you can afford. If you don't have enough for your car at the moment then save up - after all if you can afford car repayments on £8,500 on your income, then you will very quickly be able to save a couple of grand and buy something decent.

Oh and by the way, girls that are impressed by a new car are very shallow and will likely move on to the next bloke with a more up to date model!:cool:

missk_ensington

How about saving up til you've got say £2,000 and then buying a car for say, £4,000 - trying to get a 0% credit card and putting the other £2000 on that?

You can get a very decent car for £4,000 - I've just been looking at a lovely VW Passat on a 55 reg for £3000. Also if you can get a good deal on something, you can overpay the credit card for a year whilst its 0%, pay it off, sell the car hopefully getting practically the same as you paid for it and upgrade.

By then you'll have built up some positive history on your credit file, and will have £4000 to put down - and you could perhaps borrow another £4,000 and get your £8000 car. The hidden plpus being that another year down the line, you'll be out of your teens, have more no claims and lower insurance. You might also be on a higher wage.

Seems a good compromise to me :-)