Car loan best options?

singlehoop

Hi

I'm writing this on behalf of my son. He's looking for a car loan but he has an unauthorised overdraught with Santander. It's for £450 and we're sorting it out with them now. The problem is, he applied for a loan with his bank (Natwest) and it was rejected presumably because of the unpaid overdraught which does show up on his credit check. He graduated in July and immediately got a job paying £18,000 (£24 ote) so he's only been working for just over 2 months which I assume hinders him as well?? He doesn't want to keep applying for loans and being rejected so does anyone know the most likely way of being accepted. He's looking at a car costing £6000 and is putting in £2000 himself. Are we more likely to get credit through the garage on HP or trying to get a loan.

Thanks in advance.

poppasmurf_bewdley

The problem he has is his unauthorised overdraft. That immediately tells any lender that he can't manage on his current income, and also that he is unable to handle money.

I think he will need to give it at least six months before trying to get another loan.

He might be better off just buying a banger now for about £1k to get him mobile. In that price range he won't lose much (if any) money if he uses it as a trade-in in six months time.

SeanG79

Take £450 from the £2k deposit he has and settle the Santander overdraft.

Then take the remaining £1550.00 and find a car within that budget to purchase outright (there are plenty)

Does he have any authorized credit (credit card, etc.)? If not, it would not hurt, once all the unauthorized debt is settled to try and get a small credit card and settle the balance in full every month for at least 6 months (it will give lenders a reference of debt being repaid), if he has authorized credit, then again wait at least 6 months after Santander has been settled, there after apply for car finance.

Preferably he will have at least 1 years full employment, some lenders require 2 years.

Garage_Flower

Even without the unauthorised overdraft he hasn't been in employment long and is probably still in a probationary period with no employment history behind him.

Probably best to get a banger in the short term as has already been said.

CLAPTON

the story as told doesn't speak well of his financial commonsense.

he doesn't need to have an OD as he has the cash

he doesn't need an 8k car

Tomby1

Agreed with the others - he certainly needs to sort out the overdraft. If he has money saved up, why is he letting his overdraft roll on? I have a graduate overdraft, but thats 0% so no issues there.

I was in a similar situation (haven't been in my current job long, graduated last year but my employment has been a bit bonkers so its all discounted) and I did manage to get a loan.

Approached my bank (Natwest) who initially refused a loan based on my income because my wages come through in two goes each month (wage & expenses) and then eventually accepted me on a hopelessly high %.

On recommendation, I tried Sainsburys. Got the amount I wanted (£7-8k over 2 years) at a reasonable rate (8% odd) and purchased my new car last Friday. :T

So, there is hope. You just need to make sure he has made sure he can afford the repayments each month, with a good amount of money left over in case the worst happens.