Personal loan applications declined, not sure what to do to purchase a car.

joocyglutes

Mercdriver said:

How long have you been with your bank?  Did you not consider applying from your own bank for a loan?  

Just over a year. Yes I had a look, I was offered 15% apr. 

AdrianC

joocyglutes said:

Yes I have checked my file, the loan affordability is listed as weak. My salary is £20,000 and I have very little outgoings as I live with parents. (£78 car lease, £22 phone, £10 to credit card, food+ petrol.  Car Insurance was paid off in full)

So, umm, with nearly £1,500 coming in a month, and maybe £150-200/mo outgoings listed there, you should have some savings... Can't you just buy cash? Even if it does mean a cheaper car. You've clearly already got a car - has that actually died, or do you just fancy a change more than maintenance?

I don't think I'm on the electoral roll, I have just registered for that in case that may make a difference?

You should be. The household gets a form every year to complete to state who's resident.

Mercdriver

AdrianC said:

joocyglutes said:

Yes I have checked my file, the loan affordability is listed as weak. My salary is £20,000 and I have very little outgoings as I live with parents. (£78 car lease, £22 phone, £10 to credit card, food+ petrol.  Car Insurance was paid off in full)

So, umm, with nearly £1,500 coming in a month, and maybe £150-200/mo outgoings listed there, you should have some savings... Can't you just buy cash? Even if it does mean a cheaper car. You've clearly already got a car - has that actually died, or do you just fancy a change more than maintenance?

I don't think I'm on the electoral roll, I have just registered for that in case that may make a difference?

You should be. The household gets a form every year to complete to state who's resident.

As in the OP, the OP has a lease that is coming to an end.

AdrianC

<coughs, shuffles feet>

I missed that...

Grumpy_chap

Is the OP looking to buy the care he currently has on lease / PCP, or to hand back the PCP car and just buy something else?

joocyglutes

AdrianC said:

So, umm, with nearly £1,500 coming in a month, and maybe £150-200/mo outgoings listed there, you should have some savings... Can't you just buy cash? Even if it does mean a cheaper car. You've clearly already got a car - has that actually died, or do you just fancy a change more than maintenance?

I do have savings, but as in the OP, they are for my first house deposit and I do not want to use them. I would prefer to have the car as a small outgoing each month. 

Current car is a personal lease, which is coming to an end after 4 years. I wanted to purchase second hand as it's generally more financially sound than leasing.

Mercdriver

Using this calculator:

https://www.moneysupermarket.com/loans/calculator/

at 4%, a 5k loan over 4 years would be quite a bit more than you are paying at the moment monthly.  Yes, you would own the car but it is more than £30 a month more than you are paying at the moment.  Can you get a similar deal to the one you have at the moment? If you can afford the loan repayments you are talking about and can get a similarly priced deal, why not pay the difference into a separate savings account as your car fund?  £40 x 48 is just shy of £2k.  

jonesMUFCforever

OP in my opinion you will not get a low interest personal loan rate if you only want to borrow £4k -£5k.
To get the best rate your credit files need to be in an A1 state AND you will need to borrow more.
The best rates for most lenders are for £7500 upwards.

joocyglutes

Mercdriver said:

Using this calculator:

https://www.moneysupermarket.com/loans/calculator/

at 4%, a 5k loan over 4 years would be quite a bit more than you are paying at the moment monthly.  Yes, you would own the car but it is more than £30 a month more than you are paying at the moment.  Can you get a similar deal to the one you have at the moment? If you can afford the loan repayments you are talking about and can get a similarly priced deal, why not pay the difference into a separate savings account as your car fund?  £40 x 48 is just shy of £2k.  

I'm not sure, when I asked about extending the current lease, I was told the monthly price would be doubling to near £150, how it goes up in price as the car depreciates in value is beyond me, but that's what SEAT told me. Otherwise I would just keep my current car/deal.

es5595

I’d think about stopping the amount you’re putting into your help-to-buy savings at the moment, and put it aside. Even in two months you’ll have £1.5k, that should be enough to get something that will keep you going for a couple of years, maybe more. 

You’ll also have the bonus when you get your mortgage that you won’t have any car payments on it, and can just say you own a car outright. 

Again, with the algorithm tightening, this can only be a good thing. 

Finally, make sure you’ve checked all THREE of your credit records, you can access them all for free from;
https://www.moneysavingexpert.com/creditclub/ (this shows your Experian record) 

https://www.clearscore.com/ (This shows your Equifax record)
https://www.creditkarma.co.uk/ (And this is your TransUnion record)