£15k Loan - Joint or Single Application?

TractorFactor

Need £15k for a car.
Sainbury's bank seem to be the cheapest and we have a nectar card to get their best rate.

Should we apply as a single person or joint?

The nectar card is in my name.  My credit rating has taken a bit of a hit as our mortgage was changed in August last year and new mobile contract in September so it's not as amazing as it was (although still above average for my area apparently).

We can afford the repayments fine and may not apply for another couple of months so we could borrow less as we save a bit more (although that money may be used to clear a couple of credit cards - less than £1000 between them, although one has a 0% interest rate so may not bother).

MorningcoffeeIV

Your credit rating doesn't matter. It's not used in lending. It's also not real, of course.

What matters is risk and affordability.

What are your credit histories like and incomes? The fact you're  borrowing on an interest bearing card tells lenders you're living beyond your means as it is.

MalMonroe

Hi, not what you were asking but could you possibly find something a bit cheaper?: The car I have now was £6k when I got it three years ago and it was only four years old then. I was offered a 0% interest PCP for 12 months so I thought it was a great bargain. It had been very well looked after and was as new. Paid a £1500 deposit. It's still serving me well.

Have you both checked your credit reports to see what condition they are in? Your credit rating (score) is never seen by anyone but you - but your credit history is, of course. 

The fact that the credit cards you have only have small balances on them could raise red flags to lenders. They will assume that your income isn't enough to enable you to fully clear the cards and they may think that you won't be able to afford loan repayments. Whether or not one is a 0% interest rate. If it were me I'd work on trying to clear those balances before trying to borrow a substantial sum like £15k. It's a good idea of yours to postpone applying while you are saving.

Have you done an eligibility check with Sainsbury's Bank so you can get an idea of whether or not you will be accepted?

Don't forget the very sensible advice from this very site - "Remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible'.

And also, do you actually need that £15k car, or do you just want it? Having been in severe debt in the past, it makes me nervous to think of borrowing that kind of sum so I really would advise caution. 

Just my thoughts and opinions. But I've been in deep debt and it is not a place I'd like to revisit in a hurry. If you can learn from my mistakes, so much the better.

TractorFactor

MorningcoffeeIV said:

Your credit rating doesn't matter. It's not used in lending. It's also not real, of course.

What are your credit histories like and incomes? The fact you're  borrowing on an interest bearing card tells lenders you're living beyond your means as it is.

Except it sort of is.

Yes, Martin says the website numbers are made up but they're a good guide.  If someone has a rating of 1, I suspect they wouldn't get the same level of credit someone with 999 would get.

Incomes are stable, credit histories are okay - no missed payments ever.  Just a couple of hard searches in the last 6 months, which has had an impact (mortgage and new phone contract).

One credit card will be paid off (it gets paid off in full every month), the other is a long 0% deal got specifically to pay off over 18 months (but in 5 months, that too will be paid off).

MorningcoffeeIV

TractorFactor said:

MorningcoffeeIV said:

Your credit rating doesn't matter. It's not used in lending. It's also not real, of course.

What are your credit histories like and incomes? The fact you're  borrowing on an interest bearing card tells lenders you're living beyond your means as it is.

Except it sort of is.

Except it isn't.

Changing mobile provider doesn't change your risk in the eyes of lenders. Scores react to change, rather than credit worthiness.

Your 999 score may be because you have a solid history with consistent behaviour. Or because you have no credit history. Or because you are unable to get credit. Or consistently carry high debt with only min payments. Consistency in its own right is not a good thing, whatever the CRAs say.

Look closely at your incomes and who is carrying the debt. Does the other person has the income to support the borrowing on their own? If you'll need both incomes, and it sounds as if you probably do, then clear the cards beforehand. Your scores will drop but that's because you'll have reduced your debt and made yourself lower risk.