Loan Help

Ambejinn

My car decided to die over Christmas and I'm looking for a new one but I need a loan/finance to part pay for the one I want.

I called up my bank and they declined me the loan and suggested I look at Experian. I did this and the only thing that was negative was the fact that I had no successfully settled credit accounts.

Does this mean that I should close one or two of credit card accounts and if by doing this will they then can show as settled?

I've not missed any payments in the last 6 years and the loan I need I can very comfortably afford.!

Can anyone recommend what I should possibly do?

BTW, I havent asked at the dealership for finance would I stand a better chance going through them for it?!

Thanks in advance!

[Deleted User]

Ambejinn wrote: »

Does this mean that I should close one or two of credit card accounts and if by doing this will they then can show as settled?

No. Credit cards are designed for ongoing use.

What do your files (all 3) say? Any missed payments etc, financial associates, incorrect addresses etc. How much are you looking to borrow and what is your income? Are you on the electoral roll?

You are likely to stand a better change of finance via the dealer as the loan can be secured on the car, but you will probably also pay more for it.

Ambejinn

Deleted_User wrote: »

No. Credit cards are designed for ongoing use.

What do your files (all 3) say? Any missed payments etc, financial associates, incorrect addresses etc. How much are you looking to borrow and what is your income? Are you on the electoral roll?

You are likely to stand a better change of finance via the dealer as the loan can be secured on the car, but you will probably also pay more for it.

Im on 16k before bonuses, and I need 4k loan.

No missed payments, addresses correct and no associates

[Deleted User]

Any other debt? And how long have you held the cards for?

Ambejinn

I've 4 cards totaling 11k available but use 5k of it.

My cards that have outstanding amounts on are on interest free and the others I pay in full each month!

I could put the money I need on the card but I dont want to pay silly interest rates for the sake of it!

[Deleted User]

It looks like it could be affordability. You would be asking for a total debt of 9k and total limits of 15k, which is high on an income of 16k.

Do you have any savings you can use - perhaps for a chearper car for now?

Ambejinn

Im using savings of 4k already, the car is priced at 8k.

I could get a cheaper car but I'd rather get the one I actually want.

If needs be I will get a cheaper one but my original query was to how I can help myself get a loan when the only thing on "negative" was the fact i have no settled account yet never missed a payment for anything before

[Deleted User]

Remember that the negative is only Experian's view - and they're not the ones lending you the money. Lenders will look at your payment history and whther they think you can service the loan with your current debts.

19lottie82

Ambejinn wrote: »

the loan I need I can very comfortably afford.!

With the greatest respect, the fact you have 5k on credit cards, suggests otherwise.

On a 16k salary with 5 k of existing debt, I think you will struggle to find a mainstream lender who will offer you a 4k loan, especially if your own bank have rejected your application.

If you insist in getting into MORE debt for something that you don't need (a 4k car or less will suffice perfectly well), then finance looks like the most realistic option.

Ambejinn

The CC I have has interest free payments for around 2 years, I get a yearly bonus of between 10-12% bonus of my salary which will go on them cards. (The 4k Im using was what I already put aside for paying them in the future, may as well get interest on what I've saved than paying off something that has interest free period)

I'm also due 2 pay rises in the next 6 months which will take me over 20k and my out goings for other things is minimal hence me saying I can comfortably afford the repayments on the loan!

Gaz83

Ambejinn wrote: »

The CC I have has interest free payments for around 2 years, I get a yearly bonus of between 10-12% bonus of my salary which will go on them cards. (The 4k Im using was what I already put aside for paying them in the future, may as well get interest on what I've saved than paying off something that has interest free period)

I'm also due 2 pay rises in the next 6 months which will take me over 20k and my out goings for other things is minimal hence me saying I can comfortably afford the repayments on the loan!

The bank / building society don't base their affordability on what you *might* earn in the future. They base it on what you earn just now. And bonuses aren't guaranteed.

If you want to switch money around between credit cards to take advantage of interest-free offers, that's your choice, but don't then complain if a bank or building society isn't prepared to offer you more credit.

The fact is that you are asking to borrow £4k, you already have debts of £5k, and you are wanting to borrow more money rather than use your savings, when you only earn £16k. You would also have a further £6k of available credit to you. In theory, if you were accepted there would be nothing to stop you borrowing £4k and then putting another £6k on your credit cards - having debts of £15k on a salary of £16k.

That's why it's unlikely you'll be accepted for a loan - at least, one at a low interest rate. Too much of a risk.