Can I take out a bank loan with no proof of income?

mew_156

This isn't as stupid as it may sound.

Me and my partner are both students. I am due start my secondary PGCE in September and will need a more reliable car for getting to placements which can be anything up to 50 miles from my home address. However, we would need to take a joint loan out for this.

Because I will be training in MFL (shortage subject) and I have a 2:1 degree, I will receive a £15000 bursary over the course of the year paid in monthly instalments with a larger payment in January and June. We also receive £9000 in student loan/grant. So £24k altogether.

My partner's annual income is only £8700 in total. However, this is the only income my bank will take into account, and we would need a minimum income of around £10k to stand a chance. Even though I can prove that I will receive the £24k stated above plus the 8700, and that the loan can be paid back within 12 months, it's just not possible.

Ideally we want to take out a loan of £8000. This is easily accomplished on the money we will actually have, but near enough impossible on £8700 which is how the bank sees us. Does anyone have any ideas of how I can get round this? Would applying for finance through the car dealer and making a downpayment of a couple of thousand make any difference at all? Or could I get a co-signer? Or would I simply have to save my money? Ideally I would do this, but by the time I will have done this, my PGCE will not far off be over, but if this is the only option, then so be it.

Any response would be great. Thanks in advance.

Apples2

You want to repay a loan with another loan?

can you not see why that is crazy talk?

mew_156

No. The student maintenence loan is what I have lived off for the past four years as an undergrad student. I wouldn't be buying a car if I wasn't receiving a large bursary. And I'm only using just over half of that whilst saving the rest. I understand that this is they way the bank sees it, but student loans are not repaid with any kind of urgency like a normal loan, and my credit rating will never be affected by it. If for whatever reason the loan hasn't been totally repaid after 25 years then it gets written off anyway. (at least that's how it used to be).

BeckyC2be

I'm sorry if this sounds silly, but why do you need £8000 for a car - you can find brilliant runners at auctions and places like ebay for less than £1000. Then you wouldn't have to worry about getting such a large loan.

jumperjohn

Have you thought about leasing a new car? I've just done a very quick search for a rough idea. SEAT Ibiza 1.2 sport, £720 deposit £ 143 a month. There are cheaper cars too. I've just done this and the company didn't ask for proof of income, just bank statements. People may say leasing is a waste of money but it's minimal outlay and saves a loan.

antrobus

jumperjohn wrote: »

Have you thought about leasing a new car? I've just done a very quick search for a rough idea. SEAT Ibiza 1.2 sport, £720 deposit £ 143 a month. There are cheaper cars too. I've just done this and the company didn't ask for proof of income, just bank statements. People may say leasing is a waste of money but it's minimal outlay and saves a loan.

Yes, but it's still a financial commitment. That SEAT Ibiza 1.2 sport might have been available for £720 down and a £ 143 a month thereafter, but it's likely a three year deal, (or something like that) so you're now obliged to pay them £143 a month for the next three years. Not really that much different from being obliged to repay a loan, or pay HP installments over three years.

jumperjohn

antrobus wrote: »

Yes, but it's still a financial commitment. That SEAT Ibiza 1.2 sport might have been available for £720 down and a £ 143 a month thereafter, but it's likely a three year deal, (or something like that) so you're now obliged to pay them £143 a month for the next three years. Not really that much different from being obliged to repay a loan, or pay HP installments over three years.

This is true. It maybe viable to the op as an alternative to getting a loan as leasing doesn't require a minimum salary. Of course the op should make sure any financial commitment can be made. The SEAT was just an example, cheaper cars can be found if not fussy, ie Citroen C1, around £100 or less a month.

bargainbetty

Go into your branch of your bank with all your paperwork confirming the bursaries etc. Have everything proving your income to hand. Go through an application and see what happens. If your own bank says no, then your chances are slim.

Save up and buy a cheaper car - you really don't need £8k to get a good runner. I spent £2700 on an 1995 BMW and because it has been well-cared for and serviced regularly, it runs like a dream. Spend smarter, and you'll save a fortune.

mew_156

Thanks for the tips. It's something I will look into. I'm trying to look into all options available, as I still have quite a bit of time before my course starts; if I find a cheaper car that I know I'll be happy with, then it's certainly a possibility as nothing is set in stone. I'm just trying to throw around some ideas in my head, but just needed a bit of advice from people who have had experience of buying cars, as my current car was paid for in cash in a private sale due to being a cheap little runabout (on last legs now though).

Thanks again.