£3000 loan for a 18 year old?

Grumpy_chap

KirilsPopovs said:

Thanks for all your replies everyone. I think I'll hold off on the loan. Another question i have is about credit cards, I currently don't have one and the best I can get is either aqua classic with 32.9% ARP or capital one classic with 34.9%. Do you have any experiences with either of those and is it a good idea to get one of them to build credit score?
Thanks in advance.

The best way to operate a credit card is to pay off the balance in full every month.  That way, you can avoid interest charges so the APR becomes irrelevant but you can also build your credit history.

MrFrugalFever

Firstly, I am going to make some assumptions here (not always wise but here goes)....

you’re still living at home and only paying a token gesture payment monthly for the privilege of doing so....you want a small CC engined motorbike which will cost you money to buy, tax, insure and maintain. Your apprenticeship will lead to bigger and better things but most importantly to a bigger salary. The motorbike will be independence and a mode of transport for your job.

waffling aside, save up enough for bike and annual insurance, stay away from loan. Take out credit card and ALWAYS pay off in full when statement comes in. Put small deposit down on bike on credit card (£99?) then rest ‘cash’ in full to get section 75 protection and not have debt at 18

I’ve had to learn the hard way.

Coveredinbees!!!!

I wouldn't spend lots of money on a flash 125 as you will probably crash it and once you pass your test you will want something else.

KirilsPopovs

The options for credit cards I have right now are: 
100% chance to get accepted

Aqua Classic Credit Card

Capital One Classic Card

Post Office 34.9 Classic Card

Capital One Classic Complete Card

90% chance to get accepted

Fluid Credit Card

Marbles Classic Credit Card

thinkmoney Credit Card

Ocean Credit Card

From what I've gathered the best ones to choose from are Aqua or Capital. Anyone got any recommendations? All of those are under "Credit builder" section too.

jay1804

KirilsPopovs said:

The options for credit cards I have right now are: 
100% chance to get accepted

Aqua Classic Credit Card

Capital One Classic Card

Post Office 34.9 Classic Card

Capital One Classic Complete Card

90% chance to get accepted

Fluid Credit Card

Marbles Classic Credit Card

thinkmoney Credit Card

Ocean Credit Card

From what I've gathered the best ones to choose from are Aqua or Capital. Anyone got any recommendations? All of those are under "Credit builder" section too.

I have an aqua, and they have been fine. Just put monthly budgeted spends on the card and pay off in full via a Direct debt. From what I've read, capital one aren't as generous with credit limits. Use eligibility checker on aqua's site before you apply. You might want to hold off applying now, as sometimes you can get amazon gift card when you apply.

Dobbibill

As above - get a CC and use for regular spends with a DD set up to pay in full. Keep a close eye on the first payment as the DD isn't always set up in time and may require a manual payment until the DD kicks in.

If you can save three-quarters of your take home pay, you will have enough for your purchase in 4 months. Another month or so will give you the insurance costs.

All the best.

Ebe_Scrooge

There's some good advice been given RE credit cards.  Aqua might be "best" purely from the point of view that they tend to be more willing to lend to those with little credit history.  But it doesn't really matter as such which card you get.

What you really must understand is that you're getting a card to build up a history, NOT because you need credit.  You must always, always ALWAYS pay the statement off in full when it arrives (direct debit is simplest and means you'll never forget).  Doing so means that (a) you pay no interest and (b) you're starting to put lots of positive ticks on your credit file.  As long as you do always pay in full, the APR doesn't matter, as you won't be charged interest.  Use the card for things you need to buy anyway - food, travel costs, whatever.  It doesn't matter how much you put on the card - just a few quid every month will do the job.  But just make sure - every time you buy something on the card, ask yourself "am I going to be able to pay this off at the end of the month?".  A credit card, used wisely, can be an incredibly useful tool :-)

MEM62

KirilsPopovs said:

MEM62 said:

You have just reached adulthood and want to start it in debt.  That does not bode well for the finances of your future self.  You are taking home £1,100 per month, it would only take you a few months to save up and pay for it with cash.  At least then, if it is a Chinese bike, you won't still be making payments on something that meted away in the first winter of use.     

That is true, although, the bike i want to get was the most selling 125cc bike in 2020 and is very reliable apparently despite being a Chinese bike. Lexmoto lxr125.

There is a world of difference between spending £3K on a new Lexmoto and a user Jap 125.  The value of the Lexmoto will plummet like a stone and some of the components will not outlast the length of the finance.  It will also ride like cheap bike.  Spend £3k on a used Jap 125 and you have avoided the first depreciation hit - meaning that, if you look after it, you will get a lot of your money back when yo sell it on for either a bigger bike or, more likely, a car.  It will also be a far more pleasant machine to ride.        

macman

You are 18. What credit history do you actually have? 'Fair' is meaningless, because your credit rating or score is a fictitious number that lenders do not even see.
CC paid off in full every month is an excellent start, and maybe a SIM only mobile pay monthly contract, if you are not on one already?

sourcrates

MEM62 said:

KirilsPopovs said:

MEM62 said:

You have just reached adulthood and want to start it in debt.  That does not bode well for the finances of your future self.  You are taking home £1,100 per month, it would only take you a few months to save up and pay for it with cash.  At least then, if it is a Chinese bike, you won't still be making payments on something that meted away in the first winter of use.     

That is true, although, the bike i want to get was the most selling 125cc bike in 2020 and is very reliable apparently despite being a Chinese bike. Lexmoto lxr125.

There is a world of difference between spending £3K on a new Lexmoto and a user Jap 125.  The value of the Lexmoto will plummet like a stone and some of the components will not outlast the length of the finance.  It will also ride like cheap bike.  Spend £3k on a used Jap 125 and you have avoided the first depreciation hit - meaning that, if you look after it, you will get a lot of your money back when yo sell it on for either a bigger bike or, more likely, a car.  It will also be a far more pleasant machine to ride.        

Got to agree with this, these bikes rust, and fall apart after 18 months or so, the build quality is horrendous, if you live by the coast, then you can almost watch the rust as it forms in the salty air !!

Second hand Jap bike every time for me, you see a lot of 90`s 125`s still in very good order, for around a grand.

You really do not want to be getting into debt at your age, as it then limits your options in life if you have to pay down debts every month, its an easy trap to fall into, and one you will regret.