Loan quandary

AnnieLR

Early this month I applied for a £12K loan (for car purchase) with Hitachi, loan was agreed but I turned it down as the APR was too high (it had changed during application) I then approached my bank (Nationwide) online for loan and I was declined.
Now I could do a Part Exchange with my current car, so I wanted to know if you think I will be turned down straight away because of my recent credit searches (one agreed and one declined) . The loan amount being for half the amount if I go through the garage.
Thank you

forgotmyname

Apply and find out. Thats the only way of knowing.

AnnieLR

Thanks, just wondering if anyone had any experience of something similar...but yes I will apply and cross fingers.

[Deleted User]

No one else's experience will help. It all comes down to your unique circumstances.

redpete

Deleted_User wrote: »

No one else's experience will help. It all comes down to your unique circumstances.

And the criteria used by whichever lender you approach.

System

AnnieLR wrote: »

Early this month I applied for a £12K loan (for car purchase) with Hitachi, loan was agreed but I turned it down as the APR was too high (it had changed during application) I then approached my bank (Nationwide) online for loan and I was declined.
Now I could do a Part Exchange with my current car, so I wanted to know if you think I will be turned down straight away because of my recent credit searches (one agreed and one declined) . The loan amount being for half the amount if I go through the garage.
Thank you

If you've been offered a high APR by one and turned down by your own bank then it strongly suggests you're a higher risk. That doesn't necessarily mean you're up to your eyeballs in debt, you can be considered a bad risk if you've no borrowing at all. Unfortunately what it does mean is that any finance you're likely to be offered won't be at a good APR.

I would get used to the thought of continuing to use your current car for a while longer and putting away £200-£300 a month for a year or two towards a newer one.

lildoonbuggy

From my experience specialist car lenders are much more lenient than bank lenders. I was in the UK for one week and able to get a £6.5k car on loan (with £2k deposit) despite having no credit history and having started work just that week. However, when I tried to get an £8k loan from my bank 1.5 years later, I was rejected despite repaying my car loan a year prior and having a considerably higher wage.

That said, its still worth weighing up your options. Car lenders often have higher interest rates (6%+ for second hand) so do you really need such an expensive car? If yes, then it's worth factoring in extra repayments to decrease the cost and term length as you're otherwise sitting on a depreciating time bomb.

If you do buy and are negotiating price make sure you do it based on the actual car not your preferred monthly repayments, as they will do what they can to maximise their commission and hide the 'actual' price plus loan. So go in there confident about your credit record, and be prepared to walk away (they will follow). If you say you want to do a straight trade/cash purchase, they will try to up sell you anyway. This your chance to play them at their game and bring down the cost of the car you actually want. They will get a £1k+ top slice for selling a car on credit so factor that in, an remain unemotional the entire process. Good luck!