Do not have 3 year UK address and Credit history : How to get a loan?

ashishakpal

I am Indian and have lived in the UK for the last 6 months.I am now looking at getting a loan of about £3000 for a car but it looks like you need at least 3 year of UK address and credit history to be eligible? Does anyone know of any lenders who can help me in this case. Thank you in advance.

Ebe_Scrooge

The KneeCap Brothers will lend to anyone - but you'd better make absolutely sure that you keep up with repayments

Yes, you're right - most mainstream lenders like to see a bit of credit history and address history.  The simplest answer is to buy a cheaper car for cash, in the meantime get a sub-prime credit card - use it for everyday purchases and always pay in full to begin building up a history.

Make sure you're on the Electoral Roll, this is usually a big requirement for most lenders.

But the short answer is, you're unlikely to be offered a loan from any reputable company at anything approaching a sensible APR with so little history.  Is it feasible for you to buy a cheap runabout for < £1000 and save up in the meantime?

Alternatively, you could ask the dealer whether they offer any finance packages.  Since any finance is usually secured against the car (as opposed to an unsecured personal loan), you may find you'll be offered something.  No guarantees, but worth asking.

macman

Even if you can get credit, are you working and do you have the ability to service such a loan?

ashishakpal

@Ebe_Scrooge Thank you.
@macman Yes, I am full time employment and able to repay loan on time.

yksi

Unfortunately, you've been here a short time, and therefore you're a flight risk. That's why they won't lend you money. I was in the same situation five years ago. The correct answer has already been given. If you can afford loan repayments, you can afford to save up for a car. Save up and buy a £1000-1500 car instead.

In my case it took just over a year of "useful credit history" before I was offered a loan to buy a car (I spent £1600 on a 2008 Peugeot 107 with 100k miles) and it's still ferrying me about nearly four years later. Your "useful credit history" will not really start until you have probably 3-4 things on your credit files, which are things like the electoral roll, bank accounts, credit cards, and sometimes your utilities or mobile phone contracts. Some of those will be hard for you to get right now, but that's just showing you why you've been knocked back - your credit file doesn't have enough reliable info on there right now to make you look like a safe borrower. If you can't get a credit card (look on https://www.moneysavingexpert.com/creditclub/ ) then check with your own UK bank whether they might give you one, or even give you a small overdraft, as my bank told me that can help to make you look more "trusted".

It takes time to get there. Good luck.

PRAISETHESUN

As above, it takes time to build up credit history so that lenders will start viewing you in a more positive light. It's very unlikely you'll get a sizeable loan for any amount, unless it has some extortionate interest rate attached. You'll be better off in the long run saving for a few months and buying a car outright in cash IMO.

In case it helps on your credit building journey however, the LUMA card from Capital One was my starting point for building UK credit history and they were more than happy to take me on with only about 12 months of UK address history: https://www.luma.co.uk/. I only got a £200 limit at first but it was more than enough to put a few transactions through every month, and over time as you pay it off in full each month your credit history will start to improve.