Car Finance with Poor Credit

cjward23

Hi All,

Hoping for some advice.

I recently crashed my car and it is a write off, I've not yet had a payout from the insurance company but I'm not expecting much. I'm in a situation where i need to by a car and want something half decent as I cover a reasonable amount of miles.

My credit rating is poor, I currently have approx £20000 of debt over various credit cards and loans. I have a debt management plan set up with PayPlan and am paying off my debt. Luckily my outgoings each month are very low due to me living with my girlfriend and she pays the mortgage and all the bills and I pay for food and few other misc expenses. It leaves me with a reasonable about of money left over each month. More than enough for me to be able to afford approx £200 for a loan or car finance.

I have tried applying for a loan and a credit card with my bank and was declined, I also applied for a loan online with the AA and again was declined. I was however accepted for car finance through a local garage for up to £6300 but with 47.25% APR. This is not really an option that I would want to use.

There is the option of my dad taking out a loan or finance for me and I pay him every month, however what I would really like is something in my own name so it could help to rebuild my credit score.

Are there any other options available to me that would allow me to have a loan or finance in my name but not to pay a huge amount of interest?

Look forward to your replies

Chris

[Deleted User]

With 20k of debt and a DMP, you're not going to be getting an affordable loan from anyone.

Use the spare money you have for the loan and buy a cheap car that will do you for a few months.

Then use the rest of your spare money to pay off your DMP faster. Only then can you look to establish a better credit history.

marliepanda

Does your debt management plan not prohibit you from obtaining further credit? Most do.


You've not got two finance declines on your record, applying for lots of credit in a short period of time is only making things worse. The 47.5% is probably the best you'd get anyway.


However, you will almost certainly void your debt payment plan, and where will that leave you?

dealer_wins

A loan is most definitely not gonna happen.

Westminster

The DMP is not a contractual arrangement but informal and generally most creditors will agree to (eventually) freeze all interest and fees to assist you in paying down your debt.

This is usually with the proviso that you do not seek to take out any new credit agreement as you would then be seen to be treating the new creditor with more favourable terms than your existing ones.

Also - you say you have a reasonable amount of disposable income, then you can't possibly have been honest with PayPlan about your incomings and outgoings as they will always seek to take any excess income and distribute it pro-rata among all your existing creditors (who also receive copies)

There is nothing per-se to stop you doing this, but should your existing creditors find out (not that unlikely really) then they would likely restart all collection processes and start charging you fees & interest.

DCFC79

If the OP can pay finance of £200 a month whats happened to the £200 from previous months.

Speak to payplan and see what they say.