Advice where to go for a loan

michu

Hi,
I'm a newcomer to UK and have problems with getting a loan.

I've moved here in May. I earn 70K a year, work for a technology company. Since August I'm on an electoral roll. Since September I have two low-end credit cards (Vanquis with a limit of 250 and Aqua with a limit of 350 - I got them to build my credit rating, I'm using them actively and paying in full or in most every month).

Right now I'm in a need of a 15000 loan:
- to buy a car
- to buy a horse trailer and move my fiacee's horses here, as she is very miserable without them (she's a professional competing rider)
- to pay of some outstanding debts in my old country.

My monthly expenses due to loans in the old country are a bit over 300 a month. From what I'm, seeing, my 15000 loan should cost me no more than 230-280 a month, depending on the bank. So I'll be paying less every month than I do now.

I didn't know how scoring works in UK and in the summer I destroyed my credit rating by about 15 credit applications. For me it was shopping for best offer, little did I know of the influence those queries have on my credit file. Since then I've waited 3 months without additional applications before I tried again now. No luck though, I got declined by my bank (HSBC). They said that I wasn't declined because of the information they got from credit reporting agency, but because of their own internal scoring.

I have a feeling that it was because since I'm here I've been spending everything I earned each month. I was settling-in: buying furniture, other stuff for home, and paying all that remained towards my old loans in the old country, to get rid of them as soon as possible. Can that be a red flag for my bank? The loan is supposed to change that situation as well, but of course they can't know that. Maybe it would be better to go to other bank not my own, so they don't know details about my cash flow in recent months?

Also, at the end of August I had one direct debit bounced, in the amount of about 20 pounds. I got burned on how the PayPal debits money 5-6 days after the transaction, that was another thing I learned the hard way.

My question is, do I ever stand a chance to get such a loan in this situation? Where to go for it? If not such high amount, then what should be the best to try?

I'd appreciate any advice, as I can't stand my fiancee sitting at home without a way to work (she would be working as a personal trainer if she had her horses here), worrying about her thoroughly trained animals wasting away with only a basic care in the old country.

Thank you

KingElvis

You'll have hardly any UK based credit history so that kind of loan is pure fantasy at the moment.

Couldn't you hire a horse trailer and a car to tug it along to go get the critters?

CHR15

Everything looks stacked against you, missed payments, short history, multiple searches.

It would be normal to approach your own bank because they can see how you handle money - In your case that very fact is working against you.

It seems unlikley any other lender would take you on for £15k.

You may have more success by going for a HP Finance deal where the car can be secured, the odds are more in your favour as there is a tangible good to repossess if it goes wrong.

No idea if you can finance a horsebox but I can't see why not.

Tixy

Due to the limited time in the country you'll struggle to get anything other than subprime cards etc that you already have. Most lenders require you to have been resident for 3years before they'll lend. Although your own bank may consider a slightly shorter period.

I'd stick with paying off your existing loans in the other country for now and then either hire a horsebox trailer as Elvis suggests and or save up for a couple of months and buy a cheap one.
If you are earning nearly £4k a month after tax it hopefully shouldn't take you long to save up to buy a cheap one?

michu

KingElvis wrote: »

Couldn't you hire a horse trailer and a car to tug it along to go get the critters?

That's an option, yeah - but that's also a grand totally wasted and we still would be left without transportation to go to shows and competitions, and for my fiancee to drive around the country to give lessons to her customers. So we would just get the beasts here where it's twice so expensive to keep them and still will be left with part of the same problem.

But yeah, that's something I'm actively considering.

What amount on the application would be reasonable? Maybe I'll be able, for example, to buy an used trailer and that would leave only the car to be rented?

By the way, I'm surprised how the credit history is important. In my old country loans were given mostly based on salary and affordability. Well, I need to live with that, but still it's a bit strange to me. How long credit history is a 'sufficient' credit history for a 15K loan?

Thanks

michu

Tixy wrote: »

If you are earning nearly £4k a month after tax it hopefully shouldn't take you long to save up to buy a cheap one?

Yes, I'll just have to shift priorities. Before now I was putting all excess into my Polish loans and not saving, as I thought that by now I'll be able to get a good loan here. I'll have to do it the other way - pay the minimum there for some time and put away the money for the "big move" operation. Well, I was just hoping that I'll be able to do that for Christmas, to make my lady happy...

Tixy

michu wrote: »

By the way, I'm surprised how the credit history is important. In my old country loans were given mostly based on salary and affordability. Well, I need to live with that, but still it's a bit strange to me. How long credit history is a 'sufficient' credit history for a 15K loan?

The problem is, from a bank's point of view when you are newly moved to the UK there is a far greater chance that you would skip off back to your previous country and stop paying back your debts. Which makes you a much higher risk despite your salary.

I'm not suggesting you would do this but thats from a banker perspective, and its hard or impossible for them to chase you in another country.

michu

Tixy wrote: »

The problem is, from a bank's point of view when you are newly moved to the UK there is a far greater chance that you would skip off back to your previous country and stop paying back your debts. Which makes you a much higher risk despite your salary.

Sadly, that makes sense, I can see what you mean.
Do you think that there is any loan amount that would make sense in my situation to apply for, and then pay off, to build my credit history? Are there any typical thresholds that I can try to fit in?

Thanks

Tixy

I doubt you'd be accepted for anything within the first year to 18months of living here.
Might be worth approaching your bank in a few months (assuming nothing else bounces and you keep your account in good order) and ask them directly if there is an amount of time you need to be resident before they'll consider a loan application.

JimmyTheWig

I think your limits on your existing credit cards indicate the levels of credit that you will be offered.
Maybe if you've got some history behind you since applying for those then you may do a little better. Maybe a loan for £1000 might be possible.
But it doesn't sound like that would help much.

My only other thought would be to ask your employer for a loan.
You're earning decent money, so I'd like to think they view you in high regard.
They could then keep the repayments back out of your wages so would be pretty likely to get their money back.

Failing that, it's just a case of spending as little as you can and saving up.

michu

Tixy wrote: »

Might be worth approaching your bank in a few months (assuming nothing else bounces and you keep your account in good order) and ask them directly if there is an amount of time you need to be resident before they'll consider a loan application.

I've been at my bank at the beginning of September and asked this very question. They told me that I should be able to get the loan by now. They took my loan application, it was declined by the system. Then they called the underwriting team to see if they can get an override - and first answer was 'yes', then after further 30 seconds on the phone it changed to 'no' - and I got the information that it's only because of my August PayPal bounce for 20 pounds - and this blocks my applications for 3 months since it happened, so I should come back in December.

Now it's December, my situation is much better (all credit applications are at least 3 months old), I have a good payment history of 3 green months on both my credit cards... and I was declined outright without even the option of calling the underwriting this time.

Well, I don't get it.

But OK, I'll do what I've been doing - slowly build my credit history, I'll rent the car and trailer to get horsies here, and pay off my Polish loans one month at a time.

Thank you all for your insightful replies.