Can't get a new loan

nicola2611

Hi I wondered if someone could help, I currently have a loan with Sainsburys which I owe 4900 on, I phone and asked if I could borrow more as I want to purchase a new car as mine drinks so much petrol so in total with the 3300 extra would have a total loan for 8200. I asked for it to be extended so I would be paying the same amount still every month. They have come back and declined me. This was f or joint application but when they asked for my bank account I had to give them the joint one which only has my wage put in, the one where the current payment comes out from is in my husbands name only where his wage goes in. With regards to other credit I have £120 with catalogues and then we have a static on a hire purchase agreement. Also we have our mortgage. As I have now been declined I was thinking about options, I can't get the extra £3000 on my mortgage as Halifax will only do this with 80% owing and my house price has dropped the last two years and I am fixed for another two years. I don't want to put the extra on a credit card as I want to combine my current loan to keep the payments relatively similar. Another option was to pay off the loan from my savings and then get a new loan as I am aware the banks would think I could use the £8200 for something else other than the consolidation. I know you are think why don't I just use the savings but we are currently saving so much every month to help move house, I want to change my car so I can put even more money away in the savings.

Please help????

Caz3121

Do your savings pay more interest than the interest on a loan?

iolanthe07

Stick with the existing car. What you might save on petrol will go nowhere near covering the depreciation and interest you will pay if you buy a new one. I have made this mistake in the past and convinced myself that buying a new car is 'money-saving', when it almost always isn't.

Moneymash

Sorry, but what you're suggesting doesn't make sense. You want to increase your credit and the interest you pay, in order to buy a cheaper car, instead of using your savings for this. The interest you make on your savings are no where near the interest you will pay on this additional credit. Therefore you may as well use your savings to pay for the car. Also, take into account the car depreciation.

Yes your savings will go down in the short-term but will soon be built up again.

Or look at it this way the interest you will pay on the additional credit could have been put towards your savings.

DCFC79

Can I ask did you not think about the petrol consumption when you bought the car ?

CLAPTON

how much are your savings?
how much is the interest rate on your savings

list your debts and their interest rates

how much do you earn

nicola2611

I have a Santander e-saver account which is 3% and currently have £11000 in there like I said we are building this up for a deposit to move as we have lost money on our house over the last 2 years, I earn 23,000 and my husband 36,000 and we also get 1750 in child benefit, do your overdrafts go against you we both have them but don't go into them. I read somewhere that the loan provider looks at you bank account but my account is usually around 0 at the end of the month as I normally move £460 to the savings and mu husband a few hundred from his account. With regards to the MPG comment I used to only spend £10 a week which has now doubled and my insurance has gone up £100 each year even though I have had no claims. Hence the reason to change car.

CLAPTON

what are your debts?

tell_it_how_it_is

Are you saying you now only spend £20 a week on fuel? Even if you don't have far to go, that's still a nice low amount to fork out each week considering what fuel prices are like. What car is it that you drive, what's its current mileage, and how old is it?

You mention the insurance rising year on year - I suppose it's worth asking to ensure that you've checked comparison sites and the like for the cheapest deal?

On the face of it, I'd agree with iolanthe07 - it sounds like you're better off staying as is, though if you were insisting on getting a new car, would it not be more savvy to buy it outright from your savings, then sell the existing one to replenish them some?

Curr946

so, save for a new house, or save for a new car??? either way having savings and interest baring debit (ie exc 0% BT cards etc) is just a dumb thing to do....