Loan advice please!

Spikecast

Hi all, wanting some advice if possible please! Currently have no other debt other than for my current car, however its been causing me no end of problems so I'm looking to get an almost new car. My current loan with Tesco is for £9800 (with a settlement figure of £8500) I earn £1400 a month (in my hand) and I'm looking to borrow a further £10,000. I'm fortunate that I have the rest of my wages to myself as I live with my family.

I phoned Tesco up earlier to see if they would lend me an additional £10k but they said its their policy that because I'm not a homeowner they can only offer me another £6000. I'm considering getting an application with someone with a decent rate for the £10k but I'm concerned that if they decline me it will affect my credit rating? I know my rating is excellent because I recently enquired about a mortgage with my bank (halifax) and they said my rating was excellent and offered me two mortgages on the spot, I've never ever missed a payment and always paid every loan/credit card off in full.

Is it likely that if I get refused it will trash my excellent score? And does anyone think it's likely/unlikely I'll get offered that amount? On top of my current loan? I'd be surprised if I was refused but I'd rather not risk trashing my excellent score if it means getting refused.

Thanks!

chalkie99

You take home £1400 a month and want to borrow £10k on top of the existing £9800 for a car, which presumably is going to eat into the £1400 quite substantially with Road Tax, insurance and fuel.

To put the tin hat on it you have also been enquiring about getting a mortgage!

Seems to me you are dreaming of spending the same earnings several times over. Time to stop and get a reality check before you sign up to commitments you live to regret.l

Spikecast

Sorry I should have made myself clear. I'm holding off on the mortgage for a few years due to personal circumstances. So I won't be paying for the loans and a mortgage. Plus I'm not asking for advice on how to spend my money just if it's possible to get the loan?

YorkshireBoy

Spikecast wrote: »

...just if it's possible to get the loan?

You have a gross salary of a little over £21K...far below the UK average.

In my opinion no-one is going to allow you to extend your indebtedness via loans to nearly £20K.

And a Halifax front-end employee saying you have an excellent credit rating should be taken with a pinch of salt. Unless they carried out a credit search/fact find/affordability assessment they did not "offer" you two mortgages at all.

Time for a reality check?

Spikecast

Thanks for the advice. I've never had an issue with credit with anyone, not just the halifax, I've used various companies in the past for loans and CC's. All of which were paid off in full. I don't know why you doubt I was offered the mortgage, I was fully credit checked for the mortgages and have the paperwork in front of me.

chalkie99

Spikecast wrote: »

I'm not asking for advice on how to spend my money just if it's possible to get the loan?

OK then, no. I'm actually surprised you were offered another £6k. it makes you way over the normal 50% debt to earnings ratio.

Spikecast

chalkie99 wrote: »

OK then, no. I'm actually surprised you were offered another £6k. it makes you way over the normal 50% debt to earnings ratio.

Thanks, but if I've technically got £1200 spare income at the moment and my monthly repayments for the additional loan would be £200 a month I'd still have £1000 to do with what I like each month with both loans. I hardly think I would be overstretching myself? And why I would been seen as risk with a decent credit history, no payment defaults and have good relations with my bank? Unless I'm missing something? I have no other financial commitments.

chalkie99

Spikecast wrote: »

Thanks, but if I've technically got £1200 spare income at the moment and my monthly repayments for the additional loan would be £200 a month I'd still have £1000 to do with what I like each month with both loans. I hardly think I would be overstretching myself? And why I would been seen as risk with a decent credit history, no payment defaults and have good relations with my bank? Unless I'm missing something? I have no other financial commitments.

technically ....... hmmmm;)

It really doesn't matter if you think you are over stretching yourself, it is what the lenders think that counts.

£200 a month for a £10K loan looks like you are :

a) banking on getting a really good rate

b) is based on a 5 year repayment plan which is just crazy for a car, especially as you have already said it is not new.

YorkshireBoy

Spikecast wrote: »

I've used various companies in the past for loans and CC's.

Have you ever thought of saving up for the things you want/need?

I don't know why you doubt I was offered the mortgage, I was fully credit checked for the mortgages

One minute you're talking about spending nearly £20K on a car, and the next you're talking about buying a house. What will you want next week?

The two mortgage application searches, assuming they were not quotation type searches, will also (in addition to your existing commitments) have affected your credit rating with respect to any formal loan application you make now.

and my salary is closer to 24k as I earn shift allowance weekend work allowance working for the police.

You said you took home £1,400 per month, and that's what I based my reply on. The fact remains...your income, whether £21K or £24K, is still below the UK average salary and no-one is going to lend you anywhere near the £10K you want.

Spikecast

Ok thanks. I wasn't going to get a mortgage for a few years but I wanted to see what I would be offered when the time comes, so that's why they did an application with me in the bank last month. I guess I'll hold off then and build up my savings.

Spikecast

chalkie99 wrote: »

technically ....... hmmmm;)

It really doesn't matter if you think you are over stretching yourself, it is what the lenders think that counts.

£200 a month for a £10K loan looks like you are :

a) banking on getting a really good rate

b) is based on a 5 year repayment plan which is just crazy for a car, especially as you have already said it is not new.

Well the car is 6 months old. But I understand where you are coming from. I'll just save for a bit longer, I do have savings but I would like to keep them if possible. Thanks for the advice.