Advise For A Loan For Car Finance Around £15k

REKX

Hi,

I'm looking to purchase a user car for around £20k, and will be putting down £5k as cash, and possibly another £2k plus my current car's part exchange at £2k but this £4k I'm not taking into account as of yet..

I don't know my credit rating, although I believe my last mortgage application went through very quick and only needed 1 payslip (although did not go through with the mortgage). Also I have about 13k credit limit on credit cards. I spend a lot on credit but pay everything off as quick as possible such that I'm not incurring interest. Also have no outstanding debt and a property owner with no mortgage

My plan would be to borrow 15k as a loan, and then pay that back as quick as possible say within 6 months.

So I would like to know, for my position, which would be the best loan to apply for? I've seen M&S on this site's news but I would not want to say be declined and then affect my credit score as I would be looking to apply for a mortgage in perhaps 4-5 months time.

Recommendations/Advise?

Many Thanks.

[Deleted User]

A decline won't show on your credit files - only the search, and you'll have that whether you are accepted or not.

However, if you're looking to apply for a mortgage in the next 6 months, I would stay away from taking any further loans at this stage. A new 15k loan could have a major impact, both on acceptance and affordability.

It would be better to save for 4 months and pay in cash.

DCFC79

Forget your score as it's not seen by lenders, what matters is your credit history. The best loan to apply is anyone's guess, the best lender is the 1 who offers you a rate that you accept.

Wait for a months to save up and buy a cheaper used car with cash.

REKX

Deleted_User wrote: »

A decline won't show on your credit files - only the search, and you'll have that whether you are accepted or not.

However, if you're looking to apply for a mortgage in the next 6 months, I would stay away from taking any further loans at this stage. A new 15k loan could have a major impact, both on acceptance and affordability.

It would be better to save for 4 months and pay in cash.

Thank You.

The mortgage in question will be a buy to let for investment purposes at about the 60-65% LTV.

Although it would be better to wait my current car has been playing up, and I do need a decent car to travel to and from work on a daily basis so rather then buying a cheaper one now and then going to the process of selling (losing money most likely as well) and then buying my preferred car in 6+ months it would be better, I feel, to buy the car now.

Also the car has good options, and is a very reasonable price compared to its market value as others are going for higher.

REKX

Also the dealer in question are offering 7% which is their fixed amount.

I suppose this is higher than if I got a personal loan?

iolanthe07

Also the dealer in question are offering 7% which is their fixed amount.

This 7% may well be flat rate interest, which is a trick car dealers like to play. 7% flat will equate to around 15% APR.

REKX

iolanthe07 wrote: »

Also the dealer in question are offering 7% which is their fixed amount.

This 7% may well be flat rate interest, which is a trick car dealers like to play. 7% flat will equate to around 15% APR.

Oh, well I'm definitely staying away from them. 15% a bit too steep.

Clive_Woody

Some loan companies allow a 'soft search' where they give an indication of whether you might be accepted. You could try these first.

foxy-stoat

REKX wrote: »

My plan would be to borrow 15k as a loan, and then pay that back as quick as possible say within 6 months.

If you afford £2500 a month, then best thing you can do is save this amount and by June/July time go shopping for your new car with cash.

yuiop220

REKX wrote: »

Thank You.

The mortgage in question will be a buy to let for investment purposes at about the 60-65% LTV.

Although it would be better to wait my current car has been playing up, and I do need a decent car to travel to and from work on a daily basis so rather then buying a cheaper one now and then going to the process of selling (losing money most likely as well) and then buying my preferred car in 6+ months it would be better, I feel, to buy the car now.

Also the car has good options, and is a very reasonable price compared to its market value as others are going for higher.

Please don't fool yourself. You can get many reliable cars in the 3-5-7k range with 1-2k in an emergency fund. This means 3-7k total for a car, saving you a whooping 13k and this does not include the part ex for your current car.

It's okay to say you want a nicer/ newer car.

You are making good money so I would wait 4-6months and pay for the car in cash if you really want it.

REKX

yuiop220 wrote: »

Please don't fool yourself. You can get many reliable cars in the 3-5-7k range with 1-2k in an emergency fund. This means 3-7k total for a car, saving you a whooping 13k and this does not include the part ex for your current car.

It's okay to say you want a nicer/ newer car.

You are making good money so I would wait 4-6months and pay for the car in cash if you really want it.

Lol appreciate your comment. Yes its more of a performance car rather than an everyday car if I'm being honest.

I'd probably be looking to pay it off in 12 months, 6 months was being optimistic. And also need to plan for the buy to let Mortgage.

The 15k loan is with a 5k cash deposit on the vehicle. This is excluding part exchange, so I would most likely at this stage get the new car and then sell it off rather than part exchange to maximise return. Also I could put in another 2k on the deposit which would potentially leave me with 10k left on the loan and I should be able to knock that off hopefully within a year.

I also believe I have found a good deal on the car, a saving of around 3-5k from the other cars on Autotrader and having need a new car soon I figure the best thing to do is get the car now.

And I'm certainly not making good money by any stretch of imagination.