Getting a personal loan with an overdraft?

tstan

Hi guys,
First post here after years of lurking through the depths. I currently have just quit my job that was extremely low paid (£800p/m) and now have a new job much better paid. Because of the low paid job i often dipped into my overdraft, and now have an overdraft of £1000. New salary will be about £1250 after tax so sorry for the confusion of saying nearly double my previous...

Now i have started my new job with much better salary i will have a lot more money to be able to repay the overdraft bit by bit every month. Now i need a new car and am going to apply for a loan of £7000. Obviously me having an overdraft and then another bank lending me £7000 doesn't look great, but now in my current financial circumstances i will realistically be able to afford paying back the loan in the monthly rates i have been quoted, as well as paying the overdraft back bit by bit.

Now the question is, will they actually lend me the £7000 loan in the first place, because my feeling is they will see that I'm in my overdraft and automatically assume that I can't live beyond my means, which admittedly was true in my old job but now with this new one that is not the case anymore. I guess really this is for advice more than anything. And also FYI I'm only 20 so have plenty of years ahead to pay things back (if that makes any difference whatsoever!?) Thanks for any help given :j

Also FYI, I'm currently living at home paying low rent to parents with no other debts, loans or anything else other than my overdraft. I think im on the electoral roll and also have never applied for anything like a loan before other than overdraft increases. All outgoings for 1 month would be rent £140, travel to work £230, phone £50 and potentially the car and insurance if the loan gets accepted at £250 a month. So all outgoings are £670 p/m

StopIt

If you've doubled your salary, why can't you pay the £700 in one go? Where does the other £800 a month go?


Sort the overdraft, then go for a loan.

tstan

thanks for the reply, but I have no idea why 700 was there i think i got confused with the loan and what not - my overdraft is actually £1000 (edited in op). Sorting out the overdraft would take months at least and i can't afford to wait months for my car.

PeacefulWaters

Pay the overdraft off. Doable in three months.

Save up for 18 months with your extra £450.

Buy the car for cash.

If you feel you do want a loan then being under 21 isn't ideal. Being in a job less than six months is also not good. As such expect declines or higher rates.

bargainbetty

Bear in mind that some banks will not lend to people who have recently changed jobs (probation periods etc) so you may well be better off paying the overdraft off over the next two-three months and then applying for a loan.

Just as a side note, do you really need a £7k car now? At your age, you may find the insurance is cripplingly high on an outright purchase. Having 'years to pay things back' really doesn't make it sensible to over-burden yourself with high debts for things you really don't need to pay that much for.

Best of luck

Gambler101

Agree with the poster that said save up for the car.

Motoring is expensive enough without adding interest on top too.

And if you do save up £7000, you will think twice before handing it all over for a expensive car and may opt sensibly for a cheaper car!!

DCFC79

Save up for it.

System

tstan wrote: »

Now i need a new car and am going to apply for a loan of £7000.

You don't need a new car, you'd like one. Nobody NEEDS to spend £7,000 on a car, they do so because they want to. You can get one that is perfectly usable with a MOT for £1000 or less which will do until you've cleared your overdraft and got some money in the bank.

dresdendave

tstan wrote: »

Hi guys,
First post here after years of lurking through the depths. I currently have just quit my job that was extremely low paid (£800p/m) and now have a new job much better paid. Because of the low paid job i often dipped into my overdraft, and now have an overdraft of £1000.

All outgoings for 1 month would be rent £140, travel to work £230, phone £50 and potentially the car and insurance if the loan gets accepted at £250 a month. So all outgoings are £670 p/m

Your outgoings are £140 rent, a ridiculously high £50 for a phone and £230 travel, a total of £420. Even on £800 per month you had no reason to go overdrawn.


Learn to live within your means and your future self will be forever grateful.