Tesco Bank Loan

awowen10

Hi there,

I have worked tirelessly over the last 2 years of self employment to clear any previous debt.

I am now in a much more viable option to consider buying a car and pay my last bit of debt of (an overdraft) to help me with work and decided to opt for a loan with Tesco bank. They agreed the loan in principle with an APR of 8.4% with monthly repayments of £190. This is completely do-able as I budget with YNAB.

They have asked me to supply them with 3 months worth of bank statements, however as a result of my expenditure over the last year (me paying off Just a little under what I earn), i'm worried they will reject my request.

Example:
Month 1, income: 1,900 outgoings: 1,850
Month 2: income: 2,400 outgoings: 2,360 etc

I'm worried they'll think I'm erratic with my money.

Would sending a covering letter help?

I'm been working on improving my credit score over the last 2 years too and wouldn't want to hinder it by applying for another one if this gets rejected.

- would it be worth checking with the bank?
- would it be worth going straight for car finance?

TIA.

[Deleted User]

I don't imagine they will pay any attention to a covering letter.

They will generally be looking for evidence of the income you stated.

Don;t worry about any impact a single search has on your credit file.

awowen10

Deleted_User wrote: »

I don't imagine they will pay any attention to a covering letter.

They will generally be looking for evidence of the income you stated.

Don;t worry about any impact a single search has on your credit file.

How about a rejection? Or does this not show?

Ebe_Scrooge

Your credit score is meaningless. What Tesco will look at is your credit History, where they will see you have been paying off your debt - which is a good thing.


A covering letter probably won't make a shred of difference - they'll have their own policies in place, if you meet their criteria then you'll get the loan.


I would just add - if you've been working hard to clear your debts ( which is admirable, by the way ), then why are you so keen to immediately take on fresh debt against a fast-depreciating asset ? If you're self-employed and your income is variable, what would you do if you have a couple of lean months and struggle to meet your repayments ? I don't know how much you're planning on spending on a car, but you can get some very good used cars for an awful lot less than a new one. Maybe buy a cheaper car for now, run it for a couple of years - meanwhile save hard, then treat yourself to a shiny new car bought for cash ? Just a thought.

[Deleted User]

awowen10 wrote: »

How about a rejection? Or does this not show?

No. Just searches.

awowen10

Ebe_Scrooge wrote: »

Your credit score is meaningless. What Tesco will look at is your credit History, where they will see you have been paying off your debt - which is a good thing.


A covering letter probably won't make a shred of difference - they'll have their own policies in place, if you meet their criteria then you'll get the loan.


I would just add - if you've been working hard to clear your debts ( which is admirable, by the way ), then why are you so keen to immediately take on fresh debt against a fast-depreciating asset ? If you're self-employed and your income is variable, what would you do if you have a couple of lean months and struggle to meet your repayments ? I don't know how much you're planning on spending on a car, but you can get some very good used cars for an awful lot less than a new one. Maybe buy a cheaper car for now, run it for a couple of years - meanwhile save hard, then treat yourself to a shiny new car bought for cash ? Just a thought.

I spend 7-8 hours a week at the minute walking to and from work. It means I have to spend extra hours IN work and hinders me from working ON it in some respect.

My girlfriend lives almost 2 hours away and is acting like my chauffeur when we see each other, which is fine, but tiresome for her and a little embarrassing for me.

So I think now is the right time to buy one. Unfortunately I don't have the 2-3k spare to buy one outright and figured if I could afford the monthly repayments I could "treat" myself for working so damn hard for the last 2 years. (I'm only talking a 5k car I'm not thinking 14-15k)

They're just my reasonings of course. Unfortunately I don't have an influential figure in my to tell me I'm being daft which is why I posted in here too

[Deleted User]

awowen10 wrote: »

I could "treat" myself for working so damn hard for the last 2 years.

Don't treat yourself now if it means stealing from your future self. Treat your future self instead by buying a car for a few hundred quid and save all that interest.

He'll thank you when you meet up in a few years.

Thandersen

I suggest you give them what they ask for. As long as you are able to prove that you have been paying off of your previous debt, everything should be fine. They will however look for this, so be aware of this.

freeisgood

Don't forget that cars cost a lot to run and also can break down ( my last hefty bill on my 5k second hand car came to....wait for it....£3000 for a reconditioned car box. It was cheaper to fix the car than to ditch it and replace)

Please don't forget to factor the unexpected in.

Money_Rollercoaster

awowen10 wrote: »

I spend 7-8 hours a week at the minute walking to and from work. It means I have to spend extra hours IN work and hinders me from working ON it in some respect.

My girlfriend lives almost 2 hours away and is acting like my chauffeur when we see each other, which is fine, but tiresome for her and a little embarrassing for me.

Your girlfriend probably likes how fit you are because of all that walking and how keen you are to treat her nice because she drives you around ...

dresdendave

awowen10 wrote: »

I spend 7-8 hours a week at the minute walking to and from work. It means I have to spend extra hours IN work and hinders me from working ON it in some respect.

7-8 hours walking equates to about 2-2.5 hours cycling. Pick up a 2nd hand bike for about £50, no VED, insurance or MOT required, minimal maintenance costs.