Loan for car

Bubblez99

Hiya I was wondering if some1 call advise me I'm looking to buy a car for about 5 grand, I have saved 2 grand towards it but want to take out a loan for the rest. I would like to pay the loan over 3 years I was wondering if it would b better to take out a credit card any advice would b very much helpful thank you.

DebtFree14_2

There is no guarantee you will get a credit card for £3000. In fact normally it is substantially less. Without your credit history and earnings we can't really advise properly. That being said if you got accepted for a credit card for say £1500 then you would be short and the chances of you obtaining a loan would be lower.

Think do I need a 5k car, can I afford it. If you pay a loan over three years expect a higher interest rate. If your money savvy you may get a loan for 3K and then situation dependant overpay it. Have you factored in tax, insurance and fuel costs??

thebritishbloke

DebtFree14 wrote: »

There is no guarantee you will get a credit card for £3000. In fact normally it is substantially less. Without your credit history and earnings we can't really advise properly. That being said if you got accepted for a credit card for say £1500 then you would be short and the chances of you obtaining a loan would be lower.

Think do I need a 5k car, can I afford it. If you pay a loan over three years expect a higher interest rate. If your money savvy you may get a loan for 3K and then situation dependant overpay it. Have you factored in tax, insurance and fuel costs??

Not entirely correct, I'm a student and I've been building my credit for about 18 months. I was recently accepted for a BarclayCard freedom rewards with a £3,500 limit.

As for loan interest rates, 3 years is a very standard loan and you would get a very standard interest rate (~4-5%) if you have fairly good credit.

I wouldn't borrow £3,000 on a loan, you'll get a very high interest rate (18.9%+) because it's such a small amount (in terms of loans). Even if you get a credit card at 18.9%, it'll be a lot less hassle to put it on there. You wouldn't get a 3 year 0% purchases though, so you'd have to factor in getting a balance transfer (or paying it off before the 0% period ends).

You can compare loans on CompareTheMarket, where they'll tell you the illustrative rates for the amount you want to borrow and for how long. The lowest they say is 6.7%, which is fairly reasonable. If you think you have a fairly good credit rating, it's worth applying (make sure you check your credit reports before you apply).

DebtFree14_2

thebritishbloke wrote: »

Not entirely correct, I'm a student and I've been building my credit for about 18 months. I was recently accepted for a BarclayCard freedom rewards with a £3,500 limit.

As for loan interest rates, 3 years is a very standard loan and you would get a very standard interest rate (~4-5%) if you have fairly good credit.

I wouldn't borrow £3,000 on a loan, you'll get a very high interest rate (18.9%+) because it's such a small amount (in terms of loans). Even if you get a credit card at 18.9%, it'll be a lot less hassle to put it on there. You wouldn't get a 3 year 0% purchases though, so you'd have to factor in getting a balance transfer (or paying it off before the 0% period ends).

You can compare loans on CompareTheMarket, where they'll tell you the illustrative rates for the amount you want to borrow and for how long. The lowest they say is 6.7%, which is fairly reasonable. If you think you have a fairly good credit rating, it's worth applying (make sure you check your credit reports before you apply).

Partially agree.

Just be aware that a loan is a fixed rate a month and you know the interest from the time you sign the paper. A credit card opens up options to pay the minimum amounts and then get stung for interest. With a loan you know in 36 months its paid. A credit card is open to abuse unless you are very disciplined with it.

Sorry If I appear to be negative about CC. Its just I have been in debt because of them for 11 years now. Every loan I have had has worked. Every credit card has sucked me in and at the wrong time upped my limit by an extra 3K. This friday I will pay of my last credit card and Im not going to lie I will scream with joy!!!

thebritishbloke

DebtFree14 wrote: »

Partially agree.

Just be aware that a loan is a fixed rate a month and you know the interest from the time you sign the paper. A credit card opens up options to pay the minimum amounts and then get stung for interest. With a loan you know in 36 months its paid. A credit card is open to abuse unless you are very disciplined with it.

Sorry If I appear to be negative about CC. Its just I have been in debt because of them for 11 years now. Every loan I have had has worked. Every credit card has sucked me in and at the wrong time upped my limit by an extra 3K. This friday I will pay of my last credit card and Im not going to lie I will scream with joy!!!

Congratulations on getting it paid off

Unfortunately it's hit and miss, if people have enough self-restraint to be responsible, sometimes a credit card can be the best thing. Other times, as you've experienced, it's not always the case.