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

Scrapit

failed credit applications will have an adverse affect on any mortgage applications

Mercdriver

Scrapit said:

failed credit applications will have an adverse affect on any mortgage applications

Not strictly correct.  The decisions are never visible on the credit file to a potential lender.  However multiple applications can be indicative of decline decisions - though not necessarily the case.  Multiple applications will cause a mortgage lender to look more carefully and it may affect the decision on an affordability test.

AdrianC

joocyglutes said:

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. 

Mortgage lenders view your total assets as your savings minus your debts - because that's exactly what they are.

 If you borrow money with one hand, you can't pretend you've still got that money in savings in the other hand. All that's happening is that you're paying interest you don't need to.

Spend the savings, top them back up again with the money you would have paid the loan off with. You won't be kidding yourself that you've got more saved than you actually have, and you'll end up ahead.

sheramber

jonesMUFCforever said:

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.

When we were applying for a bank loan  we were advised to apply for £500 more than we wanted as the interest rate was much less.

KimJongUn88

Why don’t you try hire purchase where the car acts as security for the loan. Might be easier to get accepted.

joocyglutes

KimJongUn88 said:

Why don’t you try hire purchase where the car acts as security for the loan. Might be easier to get accepted.

wasn't aware of that, will look into it, thank you.

MinuteNoodles

joocyglutes said:

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.

Whatever you have on finance is going to reduce the amount of money a mortgage company will lend you. At least with buying out of your savings you won't be paying interest on a loan and you can replenish the savings from the monthly payments you won't have to make. Also when you do buy your house buying a car from money you had means you have one less bill going out each month. Houses cost more than the mortgage payment and you don't want to be finding out that the total cost of ownership of your house is £100 or so a month more than you'd budgetted for with £200 or so going out in a car loan repayment.

Supersonos

joocyglutes said:

KimJongUn88 said:

Why don’t you try hire purchase where the car acts as security for the loan. Might be easier to get accepted.

wasn't aware of that, will look into it, thank you.

I've bought a couple of cars with a Halifax car loan (I'm not with Halifax).  You have to give all the details of the car to Halifax and, if agreed, the cash is given directly to the dealer.  Might be a better way of doing it?

I feel for you OP.  Sounds like you're doing everything right but the computer is saying no.

noclaf

To the OP, my advice would be buy a shed/banger with cash and if you can get at least a year out of that gives you time to bolster your savings.
I also got rejected for credit earlier this year however it wasn't a loan it was for a mobile phone contract..tried twice and same issue..no idea why but on checking my credit score it seems I was being marked down for the ratio of my 0% cc balance Vs the cards credit limit. Never had a issue before with getting loans or credit cards yet was rejected for a poxy mobile contract. Anyway Vodaphones loss but I also decided to pay down my cc a bit faster rather than move it to another card to extend out the repayment time as didn't realise some lenders were also looking at the ratio of  debt 0%  you carry and how long you carry it for etc

Mojca799

I think you get free reports from the three main credit checking services through CreditKarma, ClearScore and Experian. They are the ones I personally use - they all display your credit score in a slightly different way but all give a very thorough and interesting insight into your financial status from a lenders point of view.

Good luck!