When and where should I apply for a loan

lottie3000

Right here goes. I would like to buy a new car, imagine paying a maximum of £10k for it, will not consider trading in my current car because of how much difference in price I will get trade on private with new car and old sale. Current car is worth 3.5K roughly, so i'd like to borrow the 10 with it in mind that I will pay a chunk off of it straight away.

I have just paid off one loan and on checking my credit score still shows as current. My score is currently at 994, the only debt I have now is a credit card at about 3K. But, I applied for a loan in December and was turned down for it, as I still had the loan i've just paid off for £2.5k and I think another one for about 1k and the credit card. Now this search shows up on my credit report but the only negative I have showing is that I took out a new credit card recently which is a 0% one with the balance on.

So what i'm asking is when is it best to apply for the £10k loan???

Hope you can understand my post, thanks for any help.

tinkerbell28

Your credit score is pointless.

How old are you, how much do you earn means more.

You've already got 3k outstanding debt. So what are your credit limits. So your available credit facility vs your earnings?

If you have just got another credit card, which already has 3k on it, I don't fancy your chances for 10k unless it is secured on the car. Considering you were turned down before.

lottie3000

I was surprised to be turned down before. It says in my credit score that I have 15k spare on top of mortgage, I'm mid 30's and earn over 25k and know the loans well within my budget. I've paid the other two off early.

Tixy

Certainly wait until the recent loan shows as being paid off and settled.

How recent was the new credit card taken out?

Ideally I'd probably wait until that has been open 3months at least.

You could then try applying somewhere.

As to who to try applying to, I'd consider
- whoever you just paid a loan off with (assuming all repayments were made on time),
- your own bank (assuming your account with them is well run and looks like you have sufficient surplus to afford the loan
-nationwide soft search option - the good thing with this is it doesn't put a full search on your file but will give you an indicative quoute, which will help indicate if you are likely to be accepted somewhere.

Tixy

lottie3000 wrote: »

I was surprised to be turned down before. It says in my credit score that I have 15k spare on top of mortgage, I'm mid 30's and earn over 25k and know the loans well within my budget. I've paid the other two off early.

What says you have £15k spare?

Do you mean that you have £15k of unused availability on existing unsecured credit accounts. If so that is potentially just as likely to be viewed as a negative as a positive by other potential lenders.

At £25k income with an existing £3k debt then I would think a £10k loan is probably pushing what you will likely be accepted for in the current climate. Might be possible but some lenders are likely to decline based on affordability.

lottie3000

Tixy wrote: »

What says you have £15k spare?

Do you mean that you have £15k of unused availability on existing unsecured credit accounts. If so that is potentially just as likely to be viewed as a negative as a positive by other potential lenders.

At £25k income with an existing £3k debt then I would think a £10k loan is probably pushing what you will likely be accepted for in the current climate. Might be possible but some lenders are likely to decline based on affordability.

That 15 k may be unused spare credit on 2 credit cards ones only used for cash back so always pay it off then the others got the 3 k interest free on. I have read on here that if you lower your limit it can have a negative effect on your rating, which is why I've left them.

I earn closer to 30 thank 25.

Tixy

When applying for new credit there is a balance between having too much credit - where the new lender worries you could max out the cards and then not afford the repayments on the existing debt, the maxed out cards and the new loan from them
and having your card limits so low that you look like you have maxed them out - and so you might be reckless with spending.

Whether it might make a difference in an individual's case is always guess work as different potential lenders care more or less about different factors.
But if you are declined again and if you are not likely to use the large limits on the existing cards then it might be worth reducing them down a bit (say maybe halving overall) and then trying again a couple of months later (once the new limits have shown up on your credit file).

tinkerbell28

It's not 15k spare. You would then have 28k of unsecured available debt, which would amount to nearly a years salary. On top of a mortgage. 15k "spare" 3k debt 10k loan.

I could easily see some lenders declining on grounds of affordability.

lottie3000

tinkerbell28 wrote: »

It's not 15k spare. You would then have 28k of unsecured available debt, which would amount to nearly a years salary. On top of a mortgage. 15k "spare" 3k debt 10k loan.

I could easily see some lenders declining on grounds of affordability.

It is amount of available credit, so this would be the unused l ok limits on my cards? Should I lower these l john limits or would that have an adverse effect

tinkerbell28

No one can tell you what to do. However a creditor will look at the fact. You'll have 28k worth of unsecured credit, if they lend to you. So around about a years salary. On top of a mortgage.

So if you were to max it out, affordability could well be an issue, especially if income drops or anything.

lottie3000

Thanks for the advice, I think I'll wait until the loan has disappeared and check my limits on ny credit cards, as I didn't realise they were that high and try nationwide