Available credit and hire purchase?

immoral_angeluk

Quick question.. I know that creditors will look at your available credit when assessing your application.. but does this apply to hire purchase too? I was thinking in the car and wondering if it applies as obviously secured debt like secured loans, mortgages etc don't count. As hire purchase is a secured debt, would they look at your available credit vs income when making you're an application?

PNPSUKNET

they have to take everything into account, otherwise it would not be responsable for them to lend

immoral_angeluk

PNPSUKNET wrote: »

they have to take everything into account, otherwise it would not be responsable for them to lend

No course, but what I mean is that like secured loans on property for example, because they're secured you can get loans of higher than your wage. Does the same apply to hire purchase because it's technically a secured debt?

eschaton

If it's for a car they can be pretty lenient but only if there is a high deposit which gives them more or less minimal or no risk.

immoral_angeluk

eschaton wrote: »

If it's for a car they can be pretty lenient but only if there is a high deposit which gives them more or less minimal or no risk.

Makes sense. Cheers What classes as a high deposit? Say if I had 10-20% would that acceptable?

eschaton

immoral_angeluk wrote: »

Makes sense. Cheers What classes as a high deposit? Say if I had 10-20% would that acceptable?

I wouldn't say so as that will be lucky to clear the profit margin from the dealer.

For leniency you are looking at up to 50% or at least enough for the car never to fall into negative equity if they have to re-possess it.

Mrsteve87

eschaton wrote: »

If it's for a car they can be pretty lenient but only if there is a high deposit which gives them more or less minimal or no risk.

eschaton wrote: »

I wouldn't say so as that will be lucky to clear the profit margin from the dealer.

For leniency you are looking at up to 50% or at least enough for the car never to fall into negative equity if they have to re-possess it.

Ive been wondering this for a few days as well (actually, sweating is more apt...)

Cheers!

eschaton

Mrsteve87 wrote: »

Ive been wondering this for a few days as well (actually, sweating is more apt...)

Cheers!

I can't say it's 100% correct but it would appear to be. I recently got a car costing £25,500 and with it being 0% over 4yrs got £14,200 on finance.

Despite high available credit on credit cards that I use to make money on savings, the finance company didn't bat an eyelid at the £14,200 loan. They know that the car will always be worth more than the outstanding finance.

An ex g/f got a new car in December costing £11,000, finance was 50% at 0% over 3yrs and I wouldn't say she would have got a loan for that amount due to earnings but as the car will always be worth more than the outstanding finance there wasn't any issue in her being approved.

Mrsteve87

eschaton wrote: »

I can't say it's 100% correct but it would appear to be. I recently got a car costing £25,500 and with it being 0% over 4yrs got £14,200 on finance.

Despite high available credit on credit cards that I use to make money on savings, the finance company didn't bat an eyelid at the £14,200 loan. They know that the car will always be worth more than the outstanding finance.

An ex g/f got a new car in December costing £11,000, finance was 50% at 0% over 3yrs and I wouldn't say she would have got a loan for that amount due to earnings but as the car will always be worth more than the outstanding finance there wasn't any issue in her being approved.

So basically, the better the car- the more chance of being accepted ?. Interesting

eschaton

Mrsteve87 wrote: »

So basically, the better the car- the more chance of being accepted ?. Interesting

No - the higher the deposit so there is less risk to the loan provider.

Type of car doesn't come into it.

Mrsteve87

I was talking about the value of the car. not the type