Personal loan for car

bazzyb

Whilst you can get a loan to pay off a HP, if you have a limited history and take out a HP, then 3 months later apply for a loan to buy another car (this is how it will appear from a lender’s perspective) then don’t be surprised if the result isn’t a positive one.

Whilst there are some variables to take into account, such as your income and the amount of the loan, you may well get auto-declined on affordability or a lender’s internal scoring.

If no success another option could be to re-finance after 12 months, on to a better rate HP, perhaps. Just keep in mind if/when you take out the HP that it may be a while before you’re able to get something else so don’t be tempted to take a high rate thinking you can quickly change it.

Mercdriver

Scrapit wrote: »

The above and mercdrivers posts aren't positives. If it's likely you are going to get in to difficulty don't commit to either a loan or a hp deal. How much apr are you being quoted on finance cos the personal loan rate is pretty steep.

I wasn't suggesting they were. But people can get into difficulty through no fault of their own, and circumstances can change. If you end up in financial difficulty but need your car to keep working, all other things being equal, the personal loan is the more flexible option.

If the OP is getting offers of 15-20% APR as standard across different lenders, then I would sit tight for quite some time to build more credit history. But there can be variances. I was quoted a 90% chance of 3.4% on Hitachi and Tesco Loans for my wife's car. When the application went through, Hitachi offered me a loan but at 29.9%. Tesco offered (and I took) 3%.

The dealer's finance on used cars (was a pre-reg Edge and the wife was part exing a X5 40D. ) was way higher - 12.7%.

System

I was thinking as the car loan is cheaper, intilally I could go with that and after while I’ll have built up a good credit score/history with on time payments then take a person loan to own it and the rate with be cheaper again.