Unsecured Loan Help

crazy_guy

Hi
Right a relative of mine usually comes to me to help her with her finances but i'm stumped. She currently wants a £11,000 loan for a brand new car (she can afford the repayments and cuts back on other things but new cars seems to be her downfall)

Nevertheless i advised going for the Alliance and Leicester 5.9% loan as Toyota's own finance is particulary high (around 10%.) Unfortunatly Alliance and Leicester have rejected her, due to the high sum of money the letter said. She's never defaulted on a credit agreement and is 24 years old.

I would advise her to go for another application with another provider, but i don't know who would mostly likely accept her and secondly two applications on her credit record wouldn't look great to Toyota. But then again last time they seemed to of granted the finance even though her lending experience was very low.

Ultimately its up to her but do you think toyota would still accept her with two recent applications flashing up on her record?

What other lender would be most appropriate for her age (24) and the amount?

Or should she just go with toyota finance which is £1000 more expensive but know its guarenteed?

Thoughts appreciated.

AMILLIONDOLLARS

How long does she want to be tied to her new car? You say she's 24 year old, would she be looking to taking out a mortgage in the near future, and would this borrowing effect her chances further down the line, these things are worth thinking about before she goes ahead. If she is cutting back on other things maybe she can't afford the car after all.


AMD

crazy_guy

AMILLIONDOLLARS wrote:

How long does she want to be tied to her new car? You say she's 24 year old, would she be looking to taking out a mortgage in the near future, and would this borrowing effect her chances further down the line, these things are worth thinking about before she goes ahead. If she is cutting back on other things maybe she can't afford the car after all.


AMD

I've been told that she wants to have the loan over 3 months, good thinking about the mortgage snerario, i will raise this issue defo! The way she thinks about it is if she cuts back on other things she justifies spending more in other areas, shes on a very good wage so i dont think repayments is a issue. But as being an MSE :money: i always point her in the right direction for getting things the cheapest way etc but in this snerario i dont know the way forward

mrs_deadline

Just wondering, if it's only going to be 3 months, why not save up and then haggle the price down as a cash buyer?

Debt_Free_Chick

mrs_deadline wrote:

Just wondering, if it's only going to be 3 months, why not save up and then haggle the price down as a cash buyer?

Second this.

She would save on the interest that would have paid on a loan and probably save on the price of the car too! So she gets what she wants, plus cash in her bank account .... if only she can wait for 3 months (Which to a 24 year old is like suggesting they wait for 300 years!! :rotfl: )

AMILLIONDOLLARS

I don't know of any bank that will lend money over such a short period, so in the scheme of things, she would be better off saving for it over the three month period. Oh how I wish I could save 3.5k per month:D

AMD

joughtib

One thing i've just thought of for this.....

£11000 on a brand new car.....well as soon as it is driven across the forecourt, you'll end up losing money. Before going for the new option, take a look at Auto Trader at Toyota's around the same sort of money, but used, your relative might end up with a better specification in the car, but for less cash.