What are my chances of obtaining a loan?

jennymeg2

My problem is that my car is now needing a lot of money spent on it eg brakes, starter motor etc. All expensive jobs so as it is 13years old I didn't want to spend that much on it.

Hence why I would rather get a loan and use spare cash to pay off my debts rather than fixing up an old car.

After a few months I would transfer my Argos debt to a 0% balance transfer card to avoid all the interest I'm paying at min.

SnowTiger

jennymeg2 wrote: »

I had 3 late payments on my loan.

I recently did a soft search with MONEYSUPERMARKET for loans and it said I had a high chance of getting a loan with 3 of the big banks! Still a bit scared of applying and getting refused!

Presumably the missed payments were in 2008. They drop off your credit file after six years. As it's the end of 2014 now I guess they've (probably) gone.

The only way to find out whether you'll be accepted for a loan is to apply. It may be a good idea to try your own bank first. They will have additional, hopefully positive, information about you that other lenders won't know about.

However, those overdrafts might put lenders off (including your own bank). Hmmm.

Living in an overdraft suggests that you have problems making ends meet.

People tend to borrow money for specific purchases: a car, a sofa, a boiler, etc. Overdrafts tend to be used to pay everyday living expenses, suggesting you don't have any spare money available.

jennymeg2

Should I just go straight to the credit union or building society first?

Tixy

jennymeg2 wrote: »

Should I just go straight to the credit union or building society first?

A credit union is unlikely to be an option and unlikely to be cheap compared to a mainstream bank.

Before you take on any credit I would do a detailed income & expenditure statement for yourself to work out how much you can afford towards your debts in total a month (existing ones and any new loan) otherwise you could end up taking on a financial commitment you cannot afford.

If you work out that you can afford a loan and afford to repay your existing debts then I would try your own bank first.

If you are refused by your bank then I would work on starting to reduce your debts and particularly reduce your overdraft balance each month for a couple of months and then try applying for a loan again.

jennymeg2

So basically the long shot of it all is too get rid of overdrafts and that will put me in a better position for a loan, and also more financially savvy!

Thanks all for your advice, will take it on board!

Cheers

SeanG79

If you are not approved for a personal loan, you may still be approved for vehicle finance (HP/PCP/Conditional Sale) based on the limited information you have provided. The dealer where you are looking to purchase the car will have access to these finance companies. (remember the dealer earns commission on the finance, so the rate/payments offered may be negotiable)

MEM62

jennymeg2 wrote: »

I earn £22,000 per annum. I have no savings!

Based on that statement you cannot afford to repay a loan.

Foxy-Stoat_3

jennymeg2 wrote: »

My problem is that my car is now needing a lot of money spent on it eg brakes, starter motor etc. All expensive jobs so as it is 13years old I didn't want to spend that much on it.

Hence why I would rather get a loan and use spare cash to pay off my debts rather than fixing up an old car.

After a few months I would transfer my Argos debt to a 0% balance transfer card to avoid all the interest I'm paying at min.

Please dont get a £6.5K loan just to buy another car just because you need a starter motor and brakes ? Pads, discs, calipers, lines or what?

If you must get a loan, assuming you can get one on your circumstances, pay all your bdetg off and cancel the overdrafts and credit cards, then buy another car with the balance, keeping £1000 in a savings account for repairs then build on that.