some thoughts on loan please

bingoplayer

HiI am new here so please bear with me

I applied for a £6000 loan on Monday through my bank Halifax over the course of 42 months so I would be able to buy a new car this weekend, pay off an existing credit card debt and pay my summer holiday off

I applied for this on the basis of the advertised 6.9% rate…..upon applying online I was told i would have to ring them up …long story short the loan was approved but on a 17.9% basis! roughly paying back £7074 by the end of it

I agreed as I was in a rush & the paperwork was sent out Monday (still yet to arrive)

Naively with it being the 21st!century I expected them to be able to sort the loan into my account within 6 days

This apparently is far too much to expect as I have to wait for the paperwork to arrive via second class post (would you believe it) sign the loan agreement, then send the paperwork back which they will hastily then deposit the funds within 3 working days of receiving the paperwork

This was the exact response I had when contacting Halifax’s helpine yesterday to see if they could speed the process up as I need to buy the car this Saturday via private sale

Now apart from being annoyed at Halifax’s uselessness & incompetence I’ve also have had to use a cash advance on a credit card to gather the funds for the car which has cost me just over £100 in cash Advance fees and interest

The loan funds are unlikely to appear until this time next week which is of no use to me I would have bought the car by then and have at least a month to pay the credit card back before interest starts clobbering meSo I am now asking myself if I should perhaps shop around for a better interest rate on the loan ……

I would like some advice on how much I should expect to pay back on £6000 over roughly 3 ½ years and how difficult is it to get approval on one with someone you don’t bank with

I am 21 years old still live at home, work full time & I have no debt other than £750 on a credit card with Halifax (interest free) , I take home just over £1000 a month and my fixed outgoings are about £300 a month ( set to vary slightly in April )

Any advice would be most appreciated

Thanks

gb12345

bingoplayer wrote: »

I would like some advice on how much I should expect to pay back on £6000 over roughly 3 ½ years and how difficult is it to get approval on one with someone you don’t bank with

How long is a piece of string? You pay back whatever the lender says based on the interest rate that they have deemed appropriate based on your circumstances. The 6.9% rate is their headline rate - only top class borrowers will get that.

If your bank have decided (knowing your account history) that a 17.9% rate is appropriate then why should someone who only knows what is on your credit report improve on that?

I would say there are 2 likely reasons for the rate -

1. You probably have very little credit history
2. You are looking to borrow around 50% of your salary, which is the top end of what will normally be considered

Apples2

agree, at 21, living at home and salary of that level you will never get the headline.

Be wary of spending a life on credit, it nips away quite slowly but before you know it, you are deep in trouble.

Do you really want to spend the next three years paying for your holiday?
I'm sure you will want another one by the time you have paid it off.

tell_it_how_it_is

You're 21 and not worldly wise, and as mentioned above, 6.9% is only a representative rate. Plus the fact Halifax don't know you, and that you applied online, meant you were expecting a little much to have everything sorted within six days.

If it was me, I'd have probably visited the local branch of my own bank first, and see if and what they could offer - maybe you still can. However, I suspect you're not going to find a much better rate anyway, so you're looking at nigh on £200 a month and over £2,000 total interest.

And while I appreciate you probably don't want me to play mum, my overall suggestion - as Apples2 alludes to - would be to take a look at why you're needing credit cards and loans at such a young age when you have a decent disposable income each month. If you're not on top of your money now, while you can be, it will only get tougher as extra responsibility arrives.

Ilona

Hi OP. You are going about things !!!! about face, finding a car you want, then wondering how you are going to pay for it. Try doing it the other way round. You say you have £700 every month to play with, save for a year and you will have £8,400, enough for a car? Please don't be in a hurry to take on massive debt at your age, you are setting yourself up for misery. It's a hard lesson to learn but saving up for something and paying for it with your own money is by far the best way. Lecture over, it's your life, but don't come back here in a years time telling tales of woe about getting yourself tied up in knots with borrowing and living beyond your means.
Best wishes from Auntie Ilona, the Meanqueen of frugalness.

Ha ha, you'll have to insert the appropriate word here !!!!

Xiderpunk

OP please don't take the advice your getting here lightly. You are proceeding down a slope that you WILL regret. As attractive as it is to have the car now, how about buying a £700 runabout car now with cash while you save up for a decent car in a year's time.

I can not advise you strongly enough, cancel the loan agreement immediately.

pheonixrising21

Xiderpunk wrote: »

OP please don't take the advice your getting here lightly. You are proceeding down a slope that you WILL regret. As attractive as it is to have the car now, how about buying a £700 runabout car now with cash while you save up for a decent car in a year's time.

I can not advise you strongly enough, cancel the loan agreement immediately.

OP, do NOT cancel your loan agreement unless the interest rate on your CC for the cash advances you have taken to buy the car is less than the interest rate on the loan. Unless you still have the cash and have not actually bought the car, but from reading your post it seems the car is yours and you don't have the money.

Xiderpunk, as you know that the OP WILL regret their actions, please can you send me tomorrow night's lottery numbers?

OP, its great to be able to buy a car outright with your own money, but if you buy a £700 runabout and save £700 a month, be prepared for the fact that you may have to dip into that savings pot from time to time to repair the car and understand that you may not have £8k+ in there after a year if the runabout is a lemon... Buying a car on finance will mean a newer one which is less likely to break down and more likely to have some sort of warranty. Obviously, there are no guarantees either way, but on the law of averages...

Plus the fact Halifax don't know you, and that you applied online, meant you were expecting a little much to have everything sorted within six days.

In the modern age of internet banking, why is expecting to go from approval to money in the bank in less than six days a little much? Wonga can do it in 15 mins, and I can transfer money to another person the same day (next day if after 3pm). Now I'm not comparing Halifax to Wonga in terms of approval, but once a loan is approved (which I believe the OP states thay have been) I fail to see a reason for the time difference in processing funds.
Oh, and Halifax do know the OP, they state Halifax are their bank.

UsernameAlreadyExists

bingoplayer wrote: »

I applied for a £6000 loan ... to buy a new car this weekend, pay off an existing credit card debt and pay my summer holiday off
.......
I have no debt other than £750 on a credit card with Halifax (interest free) ,
....
Any advice would be most appreciated

Logic Fail ... You're taking out a loan at 17.9% to pay off an interest free credit card debt

bingoplayer

Firstly I thank everyone for the time they have taken to reply

The car I am buying is costing me around 2600 And around 700 to insure it over the year (3300) total I was then going to pay my credit card and holiday off (1200) total promptly cancelling my credit card (Intrest free runs out in july)

The reason I initally asked for 6000 was because that was the minimum I could take out at the 6.8% go on halifaxs website and play around with the loan repayment sliders u will see what I mean

I had planned for the remaing 1500 to be put into the loan repayments each month effectively over paying every month whilst still leaving myself with some capital incase any emergencies come up over the next year

This I would hoped would eventually decrease the lenght of time And the amount of intrest I would pay back

Anyway the agreement came through this morning (finally) but I have the cash to get the car tmorrow now anyway

so I was thinking of screwing the 6k and pherhaps asking for 4k over a shorter space of time maybey 2 years if I am paying that sort of intrest rate anyway

sorry to be a bit dreamy but please bear in mind I am only 21 and I do need everything immediately :A

Jules2012

6 Days? And your own bank? Is this 1999.

My main bank is HSBC, applied for loan on Thursday around 5.30 online, money in account before 6pm. That's 2013.

Jules2012

Don't cancel your credit card, keep it as the longer its open the better it reflects on your credit history.

Just don't use unless your paying it off in full.