0% eligibility across lenders

Beery_

So I’m looking to take out a 10k loan over 5 years to pay for a used car, I currently have one on finance but I’m selling it to webuyanycar. Anyway I’ve been using the eligibility calculator and I have 0% eligibility on about 80% of lenders. I earn over 30k a year and I’m 23 years old without ever missing a payment and I pay a few subscriptions/a phone and sometimes use my credit card but pay it off straight away.
I’ve just requested to see my credit report as I am unsure what is wrong with my credit.

MovingForwards

You can obtain your reports for free from:
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MSE credit club

Ignore the credit score and rating as they're not seen or used by lenders when assessing applications. You need to check the content to make sure it's right.

Lenders don't know you're selling your original car and will only see you have finance for £x, therefore adding an extra £10k to your debt could see you outside of their criteria.

When you say about paying the CC off straight away, do you mean use it and immediately pay it off or wait until the statement is received and then pay it off?

Beery_

MovingForwards said:

You can obtain your reports for free from:
Credit karma
Clearscore
MSE credit club

Ignore the credit score and rating as they're not seen or used by lenders when assessing applications. You need to check the content to make sure it's right.

Lenders don't know you're selling your original car and will only see you have finance for £x, therefore adding an extra £10k to your debt could see you outside of their criteria.

When you say about paying the CC off straight away, do you mean use it and immediately pay it off or wait until the statement is received and then pay it off?

Yes I wait until my statement comes through and then pay it off.
Also, after I posted this I done a little more digging on the forum and realised that my current finance is more than likely what’s affecting my current eligibility situation. 

Ebe_Scrooge

Beery_ said:

my current finance is more than likely what’s affecting my current eligibility situation. 

Almost certainly.  As the previous poster said, a lender has to assume that the new loan will be in addition to your current finance, which more than likely pushes you way out of their affordability criteria.

It may be sensible to rethink your options.  £10K is a pretty large chunk of money for a used car - not extortionate, I know, but there are loads of very good cars available at half that price.  Also, a car loan over 5 years needs to be treated with a little bit of caution - the fact that you're looking at 5 years rather than 2 or 3 would suggest that the monthly payments represent a fair chunk of your available spare cash.  If that's the case, you need to consider how you'll pay for running costs, maintenance and the inevitable repairs that are likely to be required at some point.

Is it not an option to simply keep your current car until the finance is paid off, then start looking around at that point if you fancy a change?

Beery_

In my current situation I am lucky enough to still be able to stay with my parents so I am saving around half my wage each month (around £1000). The reason I’d like to take out this loan and get the car is because I am paying more than I’d like each month on this car and right now if I sell it to webuyanycar I would be making a slight profit. This is surprising as I took this pcp deal from a dealer as I was severely over mileage on my old car and was going to have to pay a large sum.
I’d like to take the car out over 5 years as this keeps my monthly costs down for when I get the chance to move out.
I’ll need to figure out what to do between selling my car and getting the loan as I use my car regularly to get to work.

[Deleted User]

Beery_ said:

The reason I’d like to take out this loan and get the car is because I am paying more than I’d like each month on this car and right now if I sell it to webuyanycar I would be making a slight profit. This is surprising 

That's because the price of second hand cars has gone up considerably in the last year - which means the one you're planning to buy probably has as well.  You'd be better off waiting for prices to stabilise and save yourself some money. 

I'd also recommend against a 5 year loan if you have the ability to save.  You're stealing a lot of money from your future self.

Beery_

Yes most of the money I make from my current car will go towards my next car purchase, but this purchase would also (hopefully) mean a lower interest rate and lower overall cost for the finance. The car I’ve been looking at has been one of my dream cars but because of the pandemic I was unable to make the purchase. Now that I know my job is again secure I’d like to make the purchase but I also understand that in this current financial climate a car shouldn’t be the top of my priority list. However, I feel as though I should let myself buy the car as I’m confident that I can easily afford it and also still save a very good amount each month.

Furthermore at my age I still need to try and enjoy life as much as possible especially after the last 18 months. 

bris

Credit cards are a problem because of the limit, not whether you pay them off straight away.
All the lender see is that you have a CC limit that could be maxed out at any time without being paid off, they look at worst case scenario, not how you manage it.

Beery_

bris said:

Credit cards are a problem because of the limit, not whether you pay them off straight away.
All the lender see is that you have a CC limit that could be maxed out at any time without being paid off, they look at worst case scenario, not how you manage it.

Thanks for the info, this makes complete sense but I’ve never actually realised that they do it this way. It’s the same as how much of an overdraft you have etc I imagine?

[Deleted User]

Limits are a factor, but not nearly as much as whether you're paying off debts in full.

ODs are generally positive as long as your not using them, or certainly not reliant on them. The OD limit is insignificant.