Opinions on loan option.

Culex

shandy1 wrote: »

We are good friends and would have no intention of breaking a contract. I'm due a pay rise in may, and later this year will be moving in with my GF so will have less cash on all fronts. Just not enough now for a car!

I have fixed your post for you.

shandy1

jamesd wrote: »

If you do go with Zopa best to wait until 6 April. Repayments on existing loans are concentrated in the first few days of the month and that produces lower borrowing rates just after the money comes in. Worst time to borrow is usually just before the end of the month.

Zopa will tell you an APR for 36 months. Because of the fee the APR goes up if you repay in 24-30 months. It's still not to bad a deal, just higher rate than it seems when you plan to repay early.

There's probably a cheaper option for you, though. Virgin/MBNA do credit card balance transfers from a current account for 4% fee and 0% interest rate for around 1.5 years. Transferring a balance from a current account means paying money into the current account. Repeat with a balance transfer for whatever''s left after the first deal ends. See the cheap credit card loans article.

If you can get a loan from Zopa you also have a good chance from any of the major loan providers. Being accepted by Zopa is a good indication that you're going to be widely accepted because Zopa only accepts good candidates. Getting a quote doesn't mean you'll be accepted, though - there's a high decline rate.

Hey thanks for the helpful post. Unfortunately, I applied or the loan on Friday so, if not tomorrow, I should hear back on Wednesday.

I've never seen my credit score as most people on here say it's pointless, as creditors have their own requirements.
However, looking at Equifax, paid in full over the years has been;
A £4000 loan, a £400 tv from currys that I paid off in a year, and a 24 month o2 contract. Current things I'm paying off with no problems is a tmobile contract, Virgin media service, a credit card which is paid in full every month and direct debits for electric, council tax, rent etc.
The only bad things were 6 late payments(not missed) for a bank account I closed down, from oct 09 to march 10.
Would that be a big issue to my applications? I have a landline number, and I'm also on the electoral role. :j

shandy1

Been rejected by Zopa, just got the email:(

jamesd

Those late payments are probably why you were declined by Zopa. Don't feel too bad about it, there was a time when I was looking at decline rates and saw them at something like 90% for some markets in the loans I was getting included in. That was probably higher than average and I expect it's less now but Zopa's still quite selective.

The late payments will hurt your chances for other applications because they are so recent. Probably enough to block you from getting some card deals but you should still have some chance and I expect you'll get one somewhere. Try Virgin.

The other payments and visible history are good.

shandy1

jamesd wrote: »

Those late payments are probably why you were declined by Zopa. Don't feel too bad about it, there was a time when I was looking at decline rates and saw them at something like 90% for some markets in the loans I was getting included in. That was probably higher than average and I expect it's less now but Zopa's still quite selective.

The late payments will hurt your chances for other applications because they are so recent. Probably enough to block you from getting some card deals but you should still have some chance and I expect you'll get one somewhere. Try Virgin.

The other payments and visible history are good.

So you think my best chance now would be to apply for the Virgin credit card? I don't want to damage my credit file anymore by having rejected applications on it. And would I have a limit of around £3000?

Culex

shandy1 wrote: »

So you think my best chance now would be to apply for the Virgin credit card?

Or would that be Virgin on the absurd?

jamesd

They are fairly accepting but I can't guarantee what they will do for acceptance or limit. It is what I'd do, though.

Zopa will not have made an application search, they use a quotation search until you're accepted. The quotation search shouldn't have any significant effect.

shandy1

As I've been looking at loans, not credit cards, I'm a bit confused to how I would use the Virgin card. Say I get the credit card, do I transfer the money from the card to my bank, then make the purchase? then set up a direct debit to pay the card off within the 18 months?

Sorry for sounding thick

jamesd

Not thick, just new to exploiting cards.

You'd do a balance transfer from your bank account to the credit card. That sends money to the bank account. Virgin is one of the cards that lets you so this directly, for a 4% balance transfer fee. See the cheap credit card loans article for more description of this sort of thing.

Since you'd be paying 0% interest (after the fee) there's no point in making higher payments than the minimum payment. You'd set up a direct debit for the minimum payment and put other repayment money into a savings accounts so you can earn some interest on it. Then use the money in the savings account to clear the card just before the deal ends. Or get another card to do a balance transfer if you haven't saved enough to fully repay.

There is a benefit to also making a £1 standing order payment in addition to the direct debit. The credit reference agencies keep records for some cards about whether only a minimum payment was made. that can be used as an indication that you might be having trouble paying. The extra Pound means that flag won't be set, so your credit record looks better.

shandy1

Thanks for that. I'm pretty sure I'd have to apply for a second card doing it that way, as I wouldn't be able to afford to pay it off in one year.
I take it, it's likely I'd be accepted for a second card at that rate, as long as I don't mess up anything in that time?

Is this the card?
http://uk.virginmoney.com/virgin/credit-cards-v3/?source=GOO-GEN-51366-63965&WT.srch=1