Dilemma when applying

DinoCarlyTom

I hope that I am not topic recycling!!

My dilemma question relates to loan applications. I am retired, a home owner with no mortgage & all of the credit rating sites rate my standing as Excellent. I have no credit card bills or usage & only have 'credit' via PayPal for a sum of around £500 which will be paid off to terms within the next 3 months. My wife & I have a steady, guaranteed monthly income.

I wish to apply for a car loan & all current efforts initially show favourable interest rates upon entering my details. The only way to obtain REAL rates of interest is to formally apply to one or more of the lenders but in doing so, a hard search on my credit rating is necessary. However, more than one or two hard searches in a six month period will negatively affect my credit rating.

How is it possiblto make a decision (shop around) for the best ACCURATE rates & select the most affordable & therefore sensible offer without destroying my credit rating when each & any investigation incurs another hard search??

CliveOfIndia

There is no way to know for certain whether you'll be accepted, or at what rate, until you make a formal application and a hard search is performed.  The best advice is usually to do an eligibility check on the lender's own site, rather than a generic aggregator site.  There's still no guarantee, of course, but at least a lender's own eligibility check will take into account their own particular lending criteria.

It's worth just mentioning, your "Excellent" score on the CRA reports has no bearing at all on how a particular lender will view you.

One thing which may be worth considering is whether the dealer offers any finance packages.  Obviously you'd have to weigh up the cost against a personal loan, but since a tailor-made car finance package will usually be secured against the car, you may stand a better chance than an unsecured personal loan.

MalMonroe

Hi, if you google "mse advice when looking for a loan", a few links from this site pop up. 

For example, there's this one about loans eligibility - 

https://www.moneysavingexpert.com/eligibility/loans-calculator/search/  

And there's more info about loans here -

https://www.moneysavingexpert.com/loans/

https://www.moneysavingexpert.com/loans/cheap-personal-loans/

If you look at your credit reports, they sometimes also list car loans that they say you have a good chance of being accepted for. But you should always do a soft search on those particular sites yourself, too.

In fact, it's not a bad idea to check your three credit reports regularly anyway, just to check for errors. (Experian, Equifax (I use Clearscore which is run by them) and TransUnion).

Nobody but you ever sees your credit rating but lenders do see your credit report of course. Your credit history is what they need to see.

Even if you do 'soft' searches, it's not always a guarantee that you'll be approved for a loan. Even if the result tells you that you will.

Don't forget what this site advises - "Remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible'."

Hope that's of some help. Good luck with your search.

DinoCarlyTom

WOW! Thank you for such RAPID responses!! Pretty much as I expected with the answers but worth asking as it proves there is nothing that I'm missing. Many, many thanks!!

Nearlyold

Your own bank may be able to give you an in principle decision based on your account history alone. Lloyds did this for me and offered £10k over 2 years @ 3.7%. Way better rate than the dealer was offering so went with the bank. Money was in my account within a few minutes. This was pre all the interest rate rises so guess the rate would be higher if I was applying today.