Loan for a car

DanEng_2

Hi there,

because I will have to commute between and London and Reading from the next month on I went to my bank (Halifax) to ask for a loan for a car. We didn't even talk about numbers and I got declined straightaway without any further explaination.

My situation is the following:

I moved to the UK in October 2012.

Since then I have a bank account with Halifax which is the one where my salary (at the moment 25200 per year which makes 1662 per month after tax) goes to. I have a overdraft limit of 1500 Pounds.

I have a mobile phone contract with O2 since October 2012 and a mobile phone contract with 3 since February 2013.

I have a credit card with Capital One since May 2013. The credit limit is 500 Pounds. I did never use this card so far.

Besides of that I am paying 19.99 per month for the gym and that's pretty much it.

Means that after all costs I would be able to save 800-1000 Pounds per month.

My credit rating according to CheckMyFile.com is the following:

Using data seen by Lenders

Callcredit 651
Equifax 651

Using data seen by Landlords/Employers

Callcredit 742
Equifax 742
Experian 742

Other Scores

Postcode 790
Application 610

I never missed any payment with any of my accounts.
Why can't a have a loan for a car at all under these circumstances? Do you have any advice for me where I could get such a loan?

[Deleted User]

New to country and only a mobile phone as evidence of credit - those are the main culprits.

I suspect you may need to make do with the train.

happycamel_2

If you can save £1000 a month buy a £500 car, run it until it dies and then use the money you've saved to buy a better one.

iolanthe07

Lenders normally expect at least three years of residency in the country before they will consider a loan.

JuicyJesus

I'll agree with the others. While new residency isn't an automatic application killer, a limited UK credit history is. That's your issue.

DanEng_2

JuicyJesus wrote: »

I'll agree with the others. While new residency isn't an automatic application killer, a limited UK credit history is. That's your issue.

Ok but how am I supposed to build up a credit rating if nobody is willing to deal with me? On the other side why would I have to deal with UK banks when I didn't live here?

It gives me the impression that banks are not willing at all to give you a loan unless you are able to buy a car with your savings in cash. But then you would have no point in paying them their interest rate which is quite high.

On the other side I could just register my own company, get a 100 or 200k as a loan, buy a decent car and sell it to myself for 1 quid and go bankrupt with the company.

So how do you guys see my chances in getting a loan for a car with the dealer who keeps the ownership on the car as a security?

iolanthe07

The same thing happened to me when I went to live in the USA 15 years ago. No credit history there, so no loan. I got round it in the end by getting to know a bank manager socially who was prepared to break the rules and take a chance. I still get offers of loan, though I move back here in 1999!

JuicyJesus

DanEng wrote: »

Ok but how am I supposed to build up a credit rating if nobody is willing to deal with me? On the other side why would I have to deal with UK banks when I didn't live here?

It gives me the impression that banks are not willing at all to give you a loan unless you are able to buy a car with your savings in cash. But then you would have no point in paying them their interest rate which is quite high.

The same way all of us built up a credit rating when we didn't have one - manage our credit well for a period of years, starting off with subprime cards with piddly limits before moving up the ladder to loans and better credit card deals.

On the other side I could just register my own company, get a 100 or 200k as a loan, buy a decent car and sell it to myself for 1 quid and go bankrupt with the company.

Unlikely that that would work, they'd credit score you personally as a director of the company and want to see a reasonable business plan. And they'd ask you for a personal guarantee, so you would be liable anyway. And bankruptcy would be a stupid move.

So basically, it's a stupid idea.

So how do you guys see my chances in getting a loan for a car with the dealer who keeps the ownership on the car as a security?

Possibly better than an unsecured loan. We can't tell you though; all you can do is go through an application and cross your fingers.

jonesMUFCforever

Halifax being part of the Lloyds banking group normally won't let you have any credit until you have resided here for a minimum of 3 years - so you have done really well to get a £1500 overdraft.

John1993_2

DanEng wrote: »

Ok but how am I supposed to build up a credit rating if nobody is willing to deal with me?..

On the other side I could just register my own company, get a 100 or 200k as a loan, buy a decent car and sell it to myself for 1 quid and go bankrupt with the company.

You are writing as though you feel that people ought to lend to you, but that's not how the system is set up. No-one's arranged the banking system so that every awkward or unusual customer can easily get every service. Some people just won't have access to credit. Credit isn't a right, and your circumstances could well mean that you can't get it.

As to your second point, why on earth do you think that someone would lend a newly registered company £100k unsecured? The answer is that of course they would not. There isn't any clever loophole to allow anyone easy access to debt.

KingElvis

Thin history file, look up thin credit history on a search engine.