Few questions

parnaby86

Hi all,

I have been browsing the forums trying to clear a few things up but I have a couple of questions left over. Sorry if this is the wrong place to put this, it is related to a few different things.

Around 2 years ago, I went to my bank to ask for a car loan of around £4k. The interest rates offered to me were ridiculous around 16%. This dropped down the more I borrowed. I was shocked at this as I had been a good lender, I checked experian and my credit rating was 290/300. The bank assistant told me that my rates could be so high due to the fact I paid my previous loan off a year early, plus I had recently been doing some credit searches which showed up on my history.

I don't want this to happen again as I am looking to get a mortgage in the next 12-24 months. Over the last 24 months I have never missed a payment, never asked for a loan etc. I left the UK a year a go for work and sold my car when I left. I am still repaying the loan on the car with the money I made from selling it. I was told this was the right thing to do so that it does not affect my credit history. This may be wrong?

Anyway, I am coming back to the UK soon and I have around £2200 left to pay with a rate of around 12%. I am thinking of buying a cheap second hand car (2000-2500) to last me around 12 months. Which would be my best option;
A) buy the car with cash and continue to make my loan repayments
pay off my loan in full and purchase the car on a 0% 12 months credit card (I fly BA regularly so looking at the Lloyds Avios Rewards Card). I will pay this off fully before the end of the 12 months.
C) Pay off the majority of my loan, but leave a small monthly payment (<£50/month) and purchase the card on the 0% card.

Any other advise is greatly appreciated.

[Deleted User]

Pay off the loan in full and buy a cheap car with cash.

Then get a credit card and use it regularly, paying off in full each month.