Can't find a loan that offers what I need!

CLAPTON

redrabbit29 wrote: »

This is quoted from the contract thing I got from A&L:


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if you settle early, the settlement amount that you would have to pay per £1000 borrowed would be as follows:

if you wanted to settle after a quarter you pay £792.15 per £1000 borrowed


if you settle at the half way point it is £552.41 per £1000 borrowed

if you settle after 3 quarters of the loan contract you pay £289.13 per £1000 borrowed.


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I find that a bit confusing. If I borrowed £7000 and after half the loan has been paid off, I would have £3500 left to pay.

What exactly would I have to pay to settle?

This means that after half the PAYMENTS you can settle for
7000 x 552.41/1000 = 3,866.87


Every payment you make pays off that months interest and the rest repays some capital
so in the early months of the loan the interest will be higher as you owe more compared to near the end of the loan when you owe less (its exactly the same for mortgage interest and all loans)

so it a very fair method

Malky

Why not use your savings? Seems silly to take out a 7K loan when you have 8K in savings sitting.

CLAPTON

Malky wrote: »

Why not use your savings? Seems silly to take out a 7K loan when you have 8K in savings sitting.

well spotted
indeed if the OP is saving for a deposit for a house then its a bit mad to spend 7k on a car in any case

shmeeko69

redrabbit29 wrote: »

Hello all,

To keep this really easy and quick rather than dribbling on:

- Loan needed for a nearly new car
- Amount of £7000
- Paid over 24 months I hope
- No penalties, or very little penalty if I want to pay it off quicker or want to pay more money each month. IMPORTANT!
- I don't want a (bloody!) payment holiday. I want to start paying it off immediately

Alliance and Leicester offered me this for 13.3% which is acceptable, however the penalties for paying early seems quite a lot and puts me off a little bit.

Thanks everyone

Like what has been previously mentioned, why don't you spend about £3k on the car and that still leaves over £5k in the pot. You can get a half decent car for that & especially in the current economic climate.

Mark :think:

w13

FREEZ wrote: »

I know it might sound strange but try changing the loan amount and seeing if the interest rate changes; usually over £7500 it becomes lower. I said that as you said you were looking to borrow £7000

Hi
OK - having been in "finance" for a few years perhaps I should shed some light .. I have NO affiliation to any company as I work independently.

Credit is personal and is offered an individual basis so what is good for one person maybe bad for another.

There are a number of comments about APR's being high and better rates on "other sites" etc, so I thought I'd try and help people understand how and what drives an APR.

The variances that drive APR to be calculated on an application are:

Credit Profile (such as - what you earn, how mcuh credit you have already, your age, where you live, any CCJ's, any late payments, any people that you are associated with such as a wife / huisband etc(!), if you make any late payments on your other credit products (including some utilities and contract mobile phones) etc.

Loan Term - for unsecured loans the max term is up to 7 years, some is 5 years. Other than "pay day" loans, the minimumn term is 1 year. The shorter the term, the higher the APR so the bank can make its revenue in a shorter space of time. It costs the bank more or less the same to lend money for 1 year or 5 years.

Loan Size - Banks will lend based on affordability. BUT there are peramters that they work to. As an example, if a bank offers £10,000 for 8%, it has to offer that rate to 66.6% of people that apply for £10,000. The remaining 33.3% they can offer what they like pretty much

Age - the younger you are, the chances are the higher APR you will be offered

Where you live - yes, this can impact the rate you get. There are areas within the UK where people are bad at repaying loans, and therefore, like it or not, you may be tarnished with the same brush.

Ultimaely, it costs the bank money to borriow money in order to lend to you. They have to make money. Not everyone pays their loan back so they have to price for that too. They Price for risk and for profit.

Best time to apply for a loan - by the 20th of the month. By the end of the month they have hit their numbers so will offer higher APR's

Yes you will see headline rates that are low APR but remember, this is based on certain terms as above, your unique application, and are often headline rates to grab your attention.

Youre true APR is the one they offer.

So person A saying "ooo that seems high" is nonesnse. It may be high for person A, but for person B it is a good rate.

If you have a very good credit rating, you are likely to get "high street" rates such as from Santander or Tesco etc.

If you have an impaired credit profile, there are very limited options available, unless you are a homeowner with at least 75% Loan To Value (i.e Mortgage + Loan = less than or equal to 75% of the value of the house)

Main non prime lender is Everyday Loans / Real Personal Finance offering the rates around 60%. They are lower value loans around £3 - £5k payable over 3 to 5 years.

Since Welcome went, there isn't anything else if you are a non homeowner. There just isn't.

There is huge demand for loans, and little supply for people who don't have great credit. These companies can cherry pick who they lend money to.

Sometimes a broker is the best option as some lend ONLY through a broker, so even going direct is a non option.

Hope this is helpful.

ethan1066

a lot of good and helpful replies you got here.I would suggest you to use some percentage of your savings and rest take out a short term loan to buy a car...this would be your best bet.

Dave101t

wouldnt a car on tick be cheaper for you, 4-5 years low or 0% apr and at the end, its yours?