Why can't I get a loan?

lukeyb

So I have been obsessing over getting a new car (Subaru impreza STi to be precise) for years now and since turning 21 with 4 years NCB I can finally insure one for a justifiable cost, still a whopping £1400 but I cant expect any better at my age with this kind of car.
Now I've managed to save up nearly 4 grand already but a perfect car came up for sale so I decided to apply for a loan as its a private sale (most nice examples are from private sellers which obviously don't offer finance) and I can't wait any longer.
I applied through zopa for £7500 over 3 years at 8.5% APR, this equates to £235 a month.
My application was declined.
Having already organised everything with the seller I couldn't give up at one application so I applied through ratesetter for the same amount at 9.1% APR which equates to £237 a month.
My application was declined..

I checked my credit score on experian a few months ago and it was in the "good" section, bordering on "excellent" and my bank adviser has told me I have an brilliant credit rating for my age. I have multiple direct debits as well as a credit card but I have never been in dept, I have always payed bills on time, coming from a skint family I have always been extremely careful with my money.

I live in a rented flat with my girlfriend and and our rent + bills + food = roughly £ 1600 a month so divided by 2 that's £800 each if we aren't trying to save on food etc.
I've been with my job for over a year now and after tax etc I take home 1700 a month so the £237 a month is easily within affordability.

Why wont anyone give me a loan? Its pretty much crushed my dreams of owning a Subaru this year.

1DayAAT

Don't fret. It's nothing personal. I have excellent credit, salary, stability etc and I too was turned down with both Zopa and Ratesetter. These 2 are very very picky with who they lend to and I think I read that 80% of applicants don't qualify.
Sounds like you have all your ducks in a row- so try Sainsburys or Tesco - both accepted me immediately, good rates and very fast process.(Be careful about applying for too many in a short space of time, but all being well, you will be accepted and have the funds within a week.)

somethingcorporate

As per the above - P2P lenders are very picky. You should try your bank who know your circumstances and personal history best.

lukeyb

1DayAAT wrote: »

Don't fret. It's nothing personal. I have excellent credit, salary, stability etc and I too was turned down with both Zopa and Ratesetter. These 2 are very very picky with who they lend to and I think I read that 80% of applicants don't qualify.

Try Sainsburys or Tesco - both accepted me immediately, good rates and very fast process.

I did try Salisburys but they too declined me. I'm afraid to try anywhere else as everyone warns me that too many applications negatively effects your credit score.

lukeyb

somethingcorporate wrote: »

As per the above - P2P lenders are very picky. You should try your bank who know your circumstances and personal history best.

Best they could offer was at 19% APR. Guy who gave me the quote was too embarrassed to even say the APR, he just wrote it down on a piece of paper.

1DayAAT

Oh, you hadn't mentioned that.

That makes me think maybe there is another problem. Try your bank as the other poster mentioned - but also make 100% sure that nothing (perhaps more recently) is flagging up on your credit file. Use Noddle for a free one.

1DayAAT

It may be your lack of proven good credit lines that is holding you back here. If you have a limited amount of 'credit experience' this can work against you, lenders like to see you have had it before (preferably multiple times) and handled it well.

heartbreak_star

Have you thought about running costs other than the insurance?

HBS x

lukeyb

Also a little but of added information. I occasionally go offshore with my job and a weeks offshore bonus is over £1000 as well as the money I'd get from selling my current car I would expect to pay off the 3 year loan within 18 months anyway.. Hence why I wanted to go for a company with no early repayment fees.

DCFC79

lukeyb wrote: »

I checked my credit score on experian a few months ago and it was in the "good" section, bordering on "excellent" and my bank adviser has told me I have an brilliant credit rating for my age. I have multiple direct debits as well as a credit card but I have never been in dept, I have always payed bills on time, coming from a skint family I have always been extremely careful with my money.

Experian aren't lenders though and what your bank advisor says isn't going to get a loan

lukeyb wrote: »

I live in a rented flat with my girlfriend and and our rent + bills + food = roughly £ 1600 a month so divided by 2 that's £800 each if we aren't trying to save on food etc.
I've been with my job for over a year now and after tax etc I take home 1700 a month so the £237 a month is easily within affordability.

Why wont anyone give me a loan? Its pretty much crushed my dreams of owning a Subaru this year.

Save up for it then, you take home 1700 a month, bills of 800 leaves you with 900 plus you get an occasional bonus of 1000, you can easily save up for it. Its not the end of the world if it dont happen this year, fear not there are other cars out there you can buy and cheaper ones.

Cash_Flow

You should of done your research before hand, you could of been sitting in your Pocket rocket by now;)

So you have already had 3 credit searches in the last few days? Tesco would be my last throw of the dice.

Whats the reason for the high APR with your bank?