Best provider for £3500 loan?

lewiszulu

Hi there,

I'm looking to get a loan for £3500 for a new car and insurance.

I will be looking to pay this off over a year. I earn £1000+ per month and can afford repayments of £400 a month.

Any advice would be greatly appreciated.

Thanks,

bouncydog1

And what about the running costs, fuel, servicing, new tyres, MOT etc. And how are you going to save up for next year's insurance and what about depreciation on the vehicle.

By the sounds of it you live at home and don't have much in the way of outgoings. You would do better to save up the money first rather than get into debt to buy a car.

lewiszulu

Hi there,

Thanks for the response.

£400 is what i can afford for the loan repayment. My outgoings total about £300 a month. I value your opinion, but i have budgeted this and I can afford what i am proposing.

Just looking for some good lender advice

the_insider

It's never a good idea to get credit for something with such a high depreciation rate as a car, if your circumstances change it's unlikely you'll be able to sell the car and clear any outstanding balance. Have you considered getting a cheaper car or saving for 6 months and getting a loan for half the amount?

no_more_cards_for_me

If you can afford £400 per month then why not just save the money in the first place ?

You earn over a £1,000 and your outgoings are £300. So you could easily put £400 away, 10 months later and you can buy with cash. No loan payments and no interest.

£3,500 won't buy you a new car, so depreciation, maintenance, road tax, insurance and petrol/diesel. How you costed that as well ? Your £400 has just gone up by

Petrol £50 at least per month
Road Tax depends on what you buy but lets say £15
maintenance and tyres £20
Insurance - ££££££££££ - lets say £80 for the sake of arguement

So thats and additional £165 - did you budget for that as well ?

Buy for cash and you have sufficient for this, buy on a loan and its more money to find. Money that you could spend on something else. Cheaper cars is a good option as is saving up.

Best lender advice - cash.

Plus you can negotiate and might get a better deal.

bouncydog1

Well if you're that determined, suggest you try your bank first as they will have details of your salary being paid in each month and can see what your outgoings are.

Just bear in mind though that if you constantly spend your salary every month and have no savings your bank will wonder how you are going to afford the repayments you say you can afford.

They will want evidence that you have been able to set aside this money every month and will already have a savings pot to put towards your purchase.

If your bank can't help you, then you are going to have to go to one of the high risk lenders and pay a high interest rate to borrow the money - have no experience of these so wouldn't know who to suggest.

Also bear in mind that if you have no credit history (see other threads regarding this) then it is going to be difficult. It is always difficult getting credit when you start out, as you are an unknown risk. The lenders like somebody who can demonstrate that they can save for the future, rather than expecting to borrow 100%.

CLAPTON

how much have you actually saved up for the car?

no_more_cards_for_me

Guess Lewis hadn't priced in all the extras involved, or saved any money.

andys15

i look at getting loans differently. lets assume the op gets a loan now for £3500, and by his budget he can afford to get it over 1 year with natwest. this will be £317 for 12 months. in that time it will cost him£304 interest, which equates to £25 per month. So OP if you save you can have a car in 9 months, if you want it now it will cost £25 a month for 12 months for the privaledge.

no_more_cards_for_me

Andy, what interest rate are you using ?

Still the question of all the other expenses.

andys15

no_more_cards_for_me wrote: »

Andy, what interest rate are you using ?

Still the question of all the other expenses.

well the natwest was just an example is 11.4% i know tesco etc are cheaper. all i am saying is that when i get something on credit i work out the interest and divide it by the months i am paying back. so if i was the op, i would think is it worth me saving for 9 months or if i got it now it would cost me £25 pm interest, so if i was desperate for something, i would ask myself if it was worth spending £25 extra for.