Loan redemption query

abc123456

Just trying to future plan....

My question is one of what would be looked at more favourably in terms of a future loan application.

Next summer, I wish to buy a particular vehicle. The cost will be around £30K. I would have £20K in savings by then, and hope to find a £10k loan. The sale would likely be a private one, and not via a dealer, hence I would not be able to use vehicle finance, I think.

I do however have a current Tesco loan of £3K, which will be around £2K by next summer. My credit score is quite good, and this loan is the only credit I have. My net income is £3K monthly, no kids and own own house (that looks weird!)...

Anyway, my actual query is....to enable success of a loan for this vehicle, would it be better to pay the existing loan off completely very soon, and apply for £10K with Tesco loans next summer, OR keep existing loan, retaining the £3K I will have soon, and next summer, apply for a larger loan of £7K with Tesco loans. Tesco loans do have great rates for loans this size, and far better than the vehicle finance companies I have look at recently.

I am just seeking what is best, and increasing my likelihood of having this extra £10K in place, ready for the purchase next summer.

Any experiences, ideas or advice appreciated. Thanks.

bigadaj

First up, given the site name, the default option is to find a car for £20k or less and buy it outright.

Assuming that first comments will be ignored then it won't make much difference, so long as payments are made, and your record is clean and you earn enough to service the repayments.

Do you have any other debts currently, if not then you shouldn't have any problems. Also get a credit card and use it regularly if you don't have one, paying off in full very month and the row of green dots on your credit file should make things even better.

abc123456

bigadaj wrote: »

....it won't make much difference...

Thanks for your reply bigadaj !