Changing a loan from one place to another

ootie

Hi all, I'm hoping that someone on here may be able to help.

My son has a loan with the dreaded Black Horse for a car. He would like to get rid of this loan and get one with someone that offers better APR but has been refused when looking to take one out.

He has joined experian and this tells him that his credit is "fair". Everything is as it should be on there, showing that he has paid around £150 a month on his loan with not one late payment. It also seems to show that he owes around £4,800 and that his credit limit (?) is £5,000.

He would like to know how he would be able to borrow the amount to pay off his loan, the settlement for this is around £3,500.

He has been asking to borrow around £7,000 - £7.500 and now realises that this was too much to ask for.

How does he let the lenders know that most of the loan, if he was to be able to borrow say £5,500, would be to pay off the loan that already exists, not to add to his credit.

Thanks all in advance, hope the questions make sense.

jonesMUFCforever

What APR is he on now - what outgoings and income?

To be honest a loan of £5500 for a fair credit rating won't come much cheaper than 20%.
Is it worth it even if he could get it?

Tixy

You can't let them know that loan is mainly to pay off another (or you can if it asks on the form what the loan is for but they won't take it into account, they'll still assess his afforability as though he ends up with the existing debt and the new debt).

What does he want to borrow more money for? has he actually rung to find out his settlement figure?

How many recent applications has he made and been turned down for?

iolanthe07

dreaded Black Horse

Why dreaded? I had a loan with Black Horse for a motor caravan at 6.9% APR and had no problems at all; they're no worse than other lenders, and better than some.

Vak

Hi guys,

I'm ooties son and really, really appreciate the help so far!

jonesMUFCforever wrote: »

What APR is he on now - what outgoings and income?

To be honest a loan of £5500 for a fair credit rating won't come much cheaper than 20%.
Is it worth it even if he could get it?

Hello jonesMUFCforever, my current APR is 32% with Blackhorse Finance. My monthly income is £900 and my monthly outgoings are £210 (this includes the car finance). I was hoping a loan at a lower APR could benefit my current financial situation.

Tixy wrote:

What does he want to borrow more money for? has he actually rung to find out his settlement figure?

How many recent applications has he made and been turned down for?

Hello Tixy, the money left from settling my finance with BHF would be used towards a bond and furnishings on a flat. My settlement figure is exactly £3450.

Unfortunately I have been turned down 5 loans within the past week (I know… I should have done a little more research before I applied for any! )



I hope this information can help.
Thanks
Vak

Eonel

Ootie - you raise a very fair question, but to the new loan company there is no absolute guarantee that Vak won't keep the additional money and extend his credit. You know he would pay it off, but as you can imagine, others before have not been so honest.

Vak - having unsuccessfully applied for 5 loans you need a dfferent strategy. These applications appear on your credit record & having too many in quick succession shows lenders you are desperate. Do not apply for any further loans for at least 3 months.

I'm afraid there is no easy answer for getting a lower rate loan. Black Horse are a relatively reputable lender and a replacement loan from a less reputable lender will likely be more expensive.

How much is the car worth? If more than the settlement figure could you sell the car, settle the loan and buy a cheap run-around with the leftover cash..

CLAPTON

income 900
spending 200

left over £700
in 5 months 700 x 5 =£3500

live cheaply and pay loan off asap and never get tempted to get into debt again (think of all that interest you are paying)
save first then spend

jonesMUFCforever

Sorry OP but nobody who pays for an expensive car loan lives on £200 per month - what about car insurance, petrol , running costs before you even eat anything or put any clothes on your body?

The figures simply do not add up.

ootie

jonesMUFCforever wrote: »

Sorry OP but nobody who pays for an expensive car loan lives on £200 per month - what about car insurance, petrol , running costs before you even eat anything or put any clothes on your body?

The figures simply do not add up.

He has a reduced hourly rate because he is living on site at the moment for work so his accommodation and electricity etc is already paid for before he gets his wages. There is also a heavily subsidised canteen as they are not allowed cookers in the accommodation provided. There is also a free laundrette. Petrol costs are extremely low because he does not have to drive into work.

He is, however, hoping to get a management position shortly which means he will be unable to live on site. Wages will be higher but outgoings obviously higher also with a flat etc and petrol costs to work. The cheap food and laundrette will still be available to him though.

ootie

He would like to be able to speak to a human being about a loan rather than just fill in a form and then he could ask them to pay the original loan off before giving him the balance. This seems impossible to do.

jonesMUFCforever

How much is the insurance for the car?

If he gets a day off he can arrange an appointment with an account manager with the bank where his wages are paid into.
If he really does have a surplus of about £700 per month he should have a nice balance on there and they would welcome a chat with him.

If he can't get a loan has he enquired with Black horse if they accept overpayments to reduce the overall interest cost?