Car Loan - best way to increase my chance of acceptance?

Jono987

Hello, i am thinking of applying for a car loan. The reason being my dad is after a new car, and he has been offered 7k part ex for his current car - an 08 lexus with 30k on the clock (Diesel)
I do a lot of miles for work and currently drive a little punto ergo the car would be perfect for me.

I currently have an overdraft of 2k which is maxed, a credit card of 2.5k which is maxed and a loan with halfiax for £1500.
Through a lot of saving, overtime, and hard work i currently have 5k, which i am going to use to pay off my overdraft and credit card.

What do you think my chances are of getting accepted for a 7k loan? Considering i already have a 1.5k one but i am going to pay off 4.5k of debt.

Also should i instantly close the credit card when i pay it off or leave it open? Does leaving it open increase credit rating as it shows i can pay it?

Thanks for any advice

Tixy

How quick do you want the loan/need to pay for the car? When you say car loan I assume that you mean a personal, unsecured loan?

And when are you planning to pay off the debts?
At the moment if all your credit is maxed out this is likely to mean a potential lender will view you as high risk. And once you pay off these debts it will take a month or so for your credit file to reflect that.

Obviously other key issues in whether you would be likely to be accepted include how much you are currently earning and what your credit history looks like (any missed payments or negatives on your credit file).

Jono987

Tixy wrote: »

How quick do you want the loan/need to pay for the car? When you say car loan I assume that you mean a personal, unsecured loan?

And when are you planning to pay off the debts?
At the moment if all your credit is maxed out this is likely to mean a potential lender will view you as high risk. And once you pay off these debts it will take a month or so for your credit file to reflect that.

Obviously other key issues in whether you would be likely to be accepted include how much you are currently earning and what your credit history looks like (any missed payments or negatives on your credit file).

Thanks - im going to pay the debts off today. I didnt realise the credit report would take a month to update - i think my dad wants his new car soonish so i may not be able to wait.

My credit rating is good i think, never missed any payments

BillJones

It's a bit weird t ohave savings of £5k at the same time as an overdraft of £2.55k (and suggests that you might need to look again at your finances) but, notwithstanding the wisdom of it, could you not give your dad the £5k instead of paying off your existing debts, and pay him back the extra £2k over time?

Jono987

BillJones wrote: »

It's a bit weird t ohave savings of £5k at the same time as an overdraft of £2.55k (and suggests that you might need to look again at your finances) but, notwithstanding the wisdom of it, could you not give your dad the £5k instead of paying off your existing debts, and pay him back the extra £2k over time?

Your right but the credit card was 0%

I could but i have had the debts a while and would like to get rid of them in favour of one larger fixed payment

Tixy

Are the 3 existing debts all with halifax?

You could possibly talk to them about whether they would consider rolling them all up in to one new loan and lending you a further £2k on top within that loan. They may consider that and cancelling your existing facilities if they think you can afford to service the new loan.

Jono987

Tixy wrote: »

Are the 3 existing debts all with halifax?

You could possibly talk to them about whether they would consider rolling them all up in to one new loan and lending you a further £2k on top within that loan. They may consider that and cancelling your existing facilities if they think you can afford to service the new loan.

Unfortunately no - the credit card is natwest. However the OD and Loan are both Halifax.

I think the first job is to check my credit rating - hopefully its ok

dl5543

A large part of whether you'll be accepted will depend on your credit history - if you've been paying off bills/loan payments etc on time.

Tixy

Jono987 wrote: »

Unfortunately no - the credit card is natwest. However the OD and Loan are both Halifax.

I think the first job is to check my credit rating - hopefully its ok

Don't pay to get a score from the credit reference agencies. You just need to look at your statutory reports to see what is showing on them.

Have you made all your payments on time? not gone over your card or overdraft limit etc?

Are you on the electoral roll?

No CCJs/defaults etc?

If so then there shouldn't be anything on your file to cause an issue.