Cheapest loan and how to work out repayments.

thegirlintheattic

The situation is that very soon I will need a new (used) car, my current car is on it's way out and is now unreliable and will soon be costing more to fix than it's worth.

I live in a rural area and have a long commute to work and so cannot easily use public transport.

I've never had a loan before, though recently got a credit card for emergencies and have been using it to build up a credit history. I currently work part-time in a professional job but fingers crossed, should be working full-time from September and will earn about £22k a year. I have some savings but not enough to be able to pay the full cost of a decent car outright so am looking to borrow 3-4k for between 1-2 years. I'm very nervous about getting a loan as I've never been in debt other than the student loan but I can't afford to wait and save up much more due to repair costs and don't want to make the mistake of spending less on a car and getting more problems quickly.

What is likely to be the cheapest place to look?
How do I work out repayments?
Are their any loans that are flexible so I'd be able to pay back a loan quicker or longer depending on what happens?

Tixy

How much are you earning at the moment? presumably you will be applying for a loan before September?

How long have you had the credit card?

Do you have any other credit accounts on your credit file? (contract phone, gym contracts, student overdraft etc)?

In terms of trying to work out repayments, your problem will be that you won't know what APR you will be given until after you apply and have been accepted for a loan. You could have a play around with an online loan calculator to see how much a 2year loan for £4k would be at various different APRs to give you an idea.

Some lenders do allow you to overpay with no penalty, others do charge a small fee for overpayments. You won't be able to reduce payments though so make sure you apply over a term you'd definitely be able to make the base payment each month.

thegirlintheattic

I currently only earn 10.5k and ideally would want to apply before September to avoid MOT etc. for another year. I would have the full time contract before getting the loan though if that helps.

Had the credit card since Christmas and have spent small (£60ish) amounts paid off in full.

I have a contract phone but it's a fixed monthly one so not sure that would help. I've had that 3 years.