Need Some Advice Please

Andrew_P

Hi Folks,

Hope everyone is well.

I am posting here as I would like some advice on what to do as I think I may have got myself into a mess. I am due to be getting a new car (used not brand new) and I got accepted for a £11k loan for 3 years with First Direct at 5.9% a few days ago with my payments approximately £320 a month. I took a little extra out than I needed as I wanted to pay off one of my credit cards which I did when the loan money was deposited into my account.

Now this is where I am in a pickle as I spoke to my father yesterday and he has said he will kindly pay for half the cost of the car which will be £5,000. Now I am not sure what to do as I don't want to ruin my credit file if I cancel the application as I don't want it to affect getting any credit in the future.

Would I be best to just keep the loan and then make an early repayment once I have the money from my father? Is it best to ring First Direct to get a settlement figure now which if I am correct you get 30 days to make payment? My first payment for the loan will come out on 1st May.

I was surprised to be accepted for a loan as when I tried Martins loan eligibility calculator there was a lot of lenders where it only rated my chances 50% or below and some no chance at all.

Im just not sure what the best thing is to do, so if anyone can offer me advice I would be extremely grateful

Thanks everyone

Andrew

[Deleted User]

If you don't need the loan, then pay it off.

Clearing a debt doesn't ruin anything.

DCFC79

Andrew_P wrote: »

Hi Folks,

Hope everyone is well.

I am posting here as I would like some advice on what to do as I think I may have got myself into a mess. I am due to be getting a new car (used not brand new) and I got accepted for a £11k loan for 3 years with First Direct at 5.9% a few days ago with my payments approximately £320 a month. I took a little extra out than I needed as I wanted to pay off one of my credit cards which I did when the loan money was deposited into my account.

Now this is where I am in a pickle as I spoke to my father yesterday and he has said he will kindly pay for half the cost of the car which will be £5,000. Now I am not sure what to do as I don't want to ruin my credit file if I cancel the application as I don't want it to affect getting any credit in the future.

Would I be best to just keep the loan and then make an early repayment once I have the money from my father? Is it best to ring First Direct to get a settlement figure now which if I am correct you get 30 days to make payment? My first payment for the loan will come out on 1st May.

I was surprised to be accepted for a loan as when I tried Martins loan eligibility calculator there was a lot of lenders where it only rated my chances 50% or below and some no chance at all.

Im just not sure what the best thing is to do, so if anyone can offer me advice I would be extremely grateful

Thanks everyone

Andrew

£10k on a used, cheaper ones out there but that's your choice.


Canceling the application wont ruin anything, all that will be recorded is a search was carried out.


If you wanted to yes you could make a lump sum payment.

Herzlos

You'll often get a better rate on more than £7500, so it might be wise to check the terms on overpayments and if allowed take out the original loan and overpay by the £5000. You may still need to keep to the £230/month payments but over a much shorter term, or you may be able to reduce the payments.


Presumably you've already got the money and still need to borrow about £6k?

Ben8282

As presumably you still want to buy the car and have already used some of the loan to pay off a credit card and your father is only giving you £5000 don't see how you can realistically cancel the loan and why you would want to do this.
Assuming that the loan permits additional payments, just repay the £5000 when you get it from your father to reduce interest. You don't need a settlement figure; just make an additional payment of £5000.

Andrew_P

Thanks for your advice everyone

My father is due to transfer me the money in the coming days as I was originally expecting to have to finance the car purchase myself. Once I have the £5,000 I will make a payment straight away to the loan. I'm probably worrying over nothing but First Direct won't be concerned with the money coming in and then I am suddenly making an overpayment on the loan?

I have checked the terms and conditions of the First Direct loan and it states I can make additional payments.

https://www1.firstdirect.com/loans-and-cards/personal-loans/#everything-you-should-know

Thanks again everyone

Andrew

AnotherJoe

Yep,you are worrying over nothing. Just make a payment of £5k off the loan.
Decide if you want to spread the remaining payments over five years so the £230 will drop or you may decide to stay at £230 and pay off quicker. I'd expect FD to give you the choice though I'm not sure about that.
FWIW I bought my last three cars each time taking the credit then paying it all off within a few days in order to get the incentives that came with taking the finance. That didn't give me any issues.
A similar "trick" can be, as someone else said above to take outa bigger loan than you need to get a better rate and then pay back what you don't need. Again, no harm to you amd that's effectively what you'd be doing.

foxy-stoat

Get the loan, buy your £10,000 car, take your Dads money and pay it all into your loan, keep the monthly repayments the same.