What purpose for loan do i state?

benbay001 · 4 July 2019 at 9:23AM

Hi,

I will soon be looking for a loan.
I intend to take out the loan in September, with the intention of buying a car.

However, I am likely to:

1) Not spend the full amount of the loan.
2) Potentially not use the money until March 2020.

Also, I don't want the car to be security for the loan as it adds complexity if the loan isn't paid off and i want to sell it.

Thanks.

zx81 · 4 July 2019 at 9:27AM

The car won't and can't be security for the loan unless you're applying for a specific vehicle secured loan.

Put car as the reason, but also leave it until you need it. That will both reduce the interest you pay and the amount you need to borrow.

MovingForwards · 4 July 2019 at 10:08AM

My brother has taken a loan for a car and moved the money to an interest paying account while he looks.

Would you not be better off waiting a few months before applying for the loan, especially as you do not want to use it until next year?

foxy-stoat · 4 July 2019 at 11:19AM

Just state that the loan is for a car.

Not sure why you need to apply for the loan 6 months before you actually need the money...is it because you cannot afford the loan and need to use the loaned money to make the loan payments for 6 months?

Sncjw · 4 July 2019 at 11:22AM

Why not save up until you need the loan then you will have reduced the amount you need to borrow.

benbay001 · 4 July 2019 at 11:26AM

Thanks, ill put that the money is for a car.

As i said, potentially not buying until March 2020.
Reason being, the car i am after (a manual Corvette) is very rare and when one comes up at a good price, it sells within days, so i need to be in a position to go and buy it as soon as one is advertised at a good price.

DrEskimo · 4 July 2019 at 11:32AM

benbay001 wrote: »

Thanks, ill put that the money is for a car.

As i said, potentially not buying until March 2020.
Reason being, the car i am after (a manual Corvette) is very rare and when one comes up at a good price, it sells within days, so i need to be in a position to go and buy it as soon as one is advertised at a good price.

Can you not just leave a deposit...?

benbay001 · 4 July 2019 at 11:52AM

And what if the loan doesn't get approved, or is at a rate im not happy with?

I want to know that i can borrow the money at a good rate, before i start car hunting.

I am more than happy to accept the £400 of interest i will pay, for borrowing £15k for 6 months longer than i potentially would, besides i hope to have bought long before 6 months.

Anyway, my question has been answered. Thanks all.

DCFC79 · 4 July 2019 at 12:33PM

I'd save up so when you come to look for a loan you don't need to borrow as much.

Have you factored in cost of insurance/tax/petrol etc into your monthly budget ?

DrEskimo · 4 July 2019 at 12:57PM

benbay001 wrote: »

And what if the loan doesn't get approved, or is at a rate im not happy with?

I want to know that i can borrow the money at a good rate, before i start car hunting.

I am more than happy to accept the £400 of interest i will pay, for borrowing £15k for 6 months longer than i potentially would, besides i hope to have bought long before 6 months.

Anyway, my question has been answered. Thanks all.

But if you accept the loan will cost you £400 to borrow early, then only leave a £400 deposit. Could even try £250.

Unlike the loan that will cost you more either way, the deposit will only be lost if you end up not buying the car. If you do, it won't cost you any more. Placing a deposit would leave you in either the same, or better situation.

MovingForwards · 4 July 2019 at 1:36PM

DCFC79 wrote: »

I'd save up so when you come to look for a loan you don't need to borrow as much.

Have you factored in cost of insurance/tax/petrol etc into your monthly budget ?

The insurance tends to be quite cheap, believe it or not, as I looked into getting a classic Mustang

What purpose for loan do i state?

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What purpose for loan do i state?

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