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  • FIRST POST
    • benbay001
    • By benbay001 4th Jul 19, 9:23 AM
    • 82Posts
    • 64Thanks
    benbay001
    What purpose for loan do i state?
    • #1
    • 4th Jul 19, 9:23 AM
    What purpose for loan do i state? 4th Jul 19 at 9:23 AM
    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.
Page 1
    • zx81
    • By zx81 4th Jul 19, 9:27 AM
    • 23,529 Posts
    • 26,125 Thanks
    zx81
    • #2
    • 4th Jul 19, 9:27 AM
    • #2
    • 4th Jul 19, 9:27 AM
    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
    • By MovingForwards 4th Jul 19, 10:08 AM
    • 2,047 Posts
    • 2,393 Thanks
    MovingForwards
    • #3
    • 4th Jul 19, 10:08 AM
    • #3
    • 4th Jul 19, 10:08 AM
    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
    • By foxy-stoat 4th Jul 19, 11:19 AM
    • 4,866 Posts
    • 2,893 Thanks
    foxy-stoat
    • #4
    • 4th Jul 19, 11:19 AM
    • #4
    • 4th Jul 19, 11:19 AM
    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
    • By Sncjw 4th Jul 19, 11:22 AM
    • 2,226 Posts
    • 1,350 Thanks
    Sncjw
    • #5
    • 4th Jul 19, 11:22 AM
    • #5
    • 4th Jul 19, 11:22 AM
    Why not save up until you need the loan then you will have reduced the amount you need to borrow.
    • benbay001
    • By benbay001 4th Jul 19, 11:26 AM
    • 82 Posts
    • 64 Thanks
    benbay001
    • #6
    • 4th Jul 19, 11:26 AM
    • #6
    • 4th Jul 19, 11:26 AM
    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
    • By DrEskimo 4th Jul 19, 11:32 AM
    • 709 Posts
    • 504 Thanks
    DrEskimo
    • #7
    • 4th Jul 19, 11:32 AM
    • #7
    • 4th Jul 19, 11:32 AM
    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.
    Originally posted by benbay001
    Can you not just leave a deposit...?
    • benbay001
    • By benbay001 4th Jul 19, 11:52 AM
    • 82 Posts
    • 64 Thanks
    benbay001
    • #8
    • 4th Jul 19, 11:52 AM
    • #8
    • 4th Jul 19, 11:52 AM
    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
    • By DCFC79 4th Jul 19, 12:33 PM
    • 34,902 Posts
    • 22,093 Thanks
    DCFC79
    • #9
    • 4th Jul 19, 12:33 PM
    • #9
    • 4th Jul 19, 12:33 PM
    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
    • By DrEskimo 4th Jul 19, 12:57 PM
    • 709 Posts
    • 504 Thanks
    DrEskimo
    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.
    Originally posted by benbay001
    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
    • By MovingForwards 4th Jul 19, 1:36 PM
    • 2,047 Posts
    • 2,393 Thanks
    MovingForwards
    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 ?
    Originally posted by DCFC79
    The insurance tends to be quite cheap, believe it or not, as I looked into getting a classic Mustang
    • MovingForwards
    • By MovingForwards 4th Jul 19, 1:38 PM
    • 2,047 Posts
    • 2,393 Thanks
    MovingForwards
    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.
    Originally posted by benbay001
    Well that makes sense and possibly a small detail you could have added in your original post.

    They pop up fairly frequently, as do many classic American motors, in Scotland, not sure whereabouts you are and how far you are looking.
    • benbay001
    • By benbay001 4th Jul 19, 5:03 PM
    • 82 Posts
    • 64 Thanks
    benbay001
    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 ?
    Originally posted by DCFC79

    I would normally save up and would normally tell other people to save up, but my wages have jumped big time in the last 2 years, as in September i will be finishing a 4 year apprenticeship. They will have nearly doubled.


    I gave up quite a lot of man toys when i started my apprenticeship, and now ive finished it, i would like a small reward for myself.


    Of course, im not guaranteed a job at the end of my apprenticeship, which is why i havnt started car shopping yet.


    As for factoring in running costs, yes i have. I have two cars at the moment, albeit my weekend car is cheaper to run than a corvette (MR2) my everyday car is dead cheap to run, its a Toyota iQ and is the car that i do the bulk of my annual mileage in.


    Assuming i don't get life style creep, i will have a smidge under 1k disposable income already allowing for 40 pw on "entertainment" and i already have a flat on mortgage, 15% pension contributions and intend to invest 400 per month.


    The car is at the bottom of its depreciation curve and is likely to appreciate if anything and as fast cars go, they are considered very reliable.

    For those of you that are curious, i have been quoted 600 for insurance (ill be 27yo).


    Again, thanks for the help.
    • benbay001
    • By benbay001 4th Jul 19, 6:02 PM
    • 82 Posts
    • 64 Thanks
    benbay001
    As i have read many and not yet posted mine, here is a SOA, i would genuinely appreciate criticism .
    My GF lives with me, but pays 200 pm and then i pay all the bills.
    I dont have a TV, may well be getting one soon, but she will pay licence as i dont watch it.


    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household.........
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 2200
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 200
    Total monthly income.................... 2400


    Monthly Expense Details

    Mortgage................................ 408
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 84
    Council tax............................. 91
    Electricity............................. 70
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 34
    Telephone (land line)................... 0
    Mobile phone............................ 17
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 17
    Groceries etc. ......................... 160
    Clothing................................ 10
    Petrol/diesel........................... 160
    Road tax................................ 27
    Car Insurance........................... 75
    Car maintenance (including MOT)......... 100
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 6
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 200
    Holiday................................. 33
    Emergency fund.......................... 41.6
    amazon.................................. 4
    Total monthly expenses.................. 1537.6



    Assets

    Cash.................................... 2000
    House value (Gross)..................... 115000
    Shares and bonds........................ 1700
    Car(s).................................. 20000
    Other assets............................ 0
    Total Assets............................ 138700



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 98000....(408)......2.67
    Total secured & HP debts...... 98000.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Virg (24m 0% remain)...........2300......25........0
    potential car loan.............15000.....350.......5
    Total unsecured debts..........17300.....375.......-



    Monthly Budget Summary

    Total monthly income.................... 2,400
    Expenses (including HP & secured debts). 1,537.6
    Available for debt repayments........... 862.4
    Monthly UNsecured debt repayments....... 375
    Amount left after debt repayments....... 487.4


    Personal Balance Sheet Summary
    Total assets (things you own)........... 138,700
    Total HP & Secured debt................. -98,000
    Total Unsecured debt.................... -17,300
    Net Assets.............................. 23,400


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    • Robisere
    • By Robisere 4th Jul 19, 8:27 PM
    • 2,774 Posts
    • 3,752 Thanks
    Robisere
    As a former Classic Car workshop foreman and long-term aficionado of Yank metal, I hope you have somewhere secure to store your Corvette. You are correct in saying that the manual is more sought-after, but I wonder which model, from what era? 60 years the 'vette has been in production, I think in 7 generations (8th is about to be announced I believe)

    The early ones in good condition are worth a lot of money: show condition early 'vettes fetch astronomical prices. So, with all due respect, I don't think you are talking an early model. Have you any friends or contacts in the States? It might be more economical if someone over there could source a good one for you, if you don't mind LH drive.

    Good luck, and if you find and finance a good one, please let us know here how it went.
    I think this job really needs
    a much bigger hammer.
    • benbay001
    • By benbay001 4th Jul 19, 9:04 PM
    • 82 Posts
    • 64 Thanks
    benbay001
    As a former Classic Car workshop foreman and long-term aficionado of Yank metal, I hope you have somewhere secure to store your Corvette. You are correct in saying that the manual is more sought-after, but I wonder which model, from what era? 60 years the 'vette has been in production, I think in 7 generations (8th is about to be announced I believe)

    The early ones in good condition are worth a lot of money: show condition early 'vettes fetch astronomical prices. So, with all due respect, I don't think you are talking an early model. Have you any friends or contacts in the States? It might be more economical if someone over there could source a good one for you, if you don't mind LH drive.

    Good luck, and if you find and finance a good one, please let us know here how it went.
    Originally posted by Robisere
    Hi,
    Im after a C5 Z06 preferably but am also considering normal C5s, aslong as they are manual.
    A few C6s creep into budget.

    Budget up to 20k.
    • benbay001
    • By benbay001 8th Aug 19, 9:07 PM
    • 82 Posts
    • 64 Thanks
    benbay001
    Sorry to bring back up my old thread, but since posting, i have received and signed my contract.

    If i was applying for a loan today, can i state my income as 37200, or would it have to be my current salary of 26500?

    As i think i mentioned above, the job is with the same company that i am about to complete my apprenticeship with, so there is no probationary period.

    Is it realistic that i could contact the loan provider and ask for written confirmation that they are willing for me to put down my future income?

    The car in question that im worried i will miss out on can be viewed here : https://www.pistonheads.com/classifieds/used-cars/chevrolet/corvette/corvette-torch-red-c5-z06-405hp-2002/9853312

    Thanks
    Ben
    • Bermonia
    • By Bermonia 8th Aug 19, 9:16 PM
    • 857 Posts
    • 772 Thanks
    Bermonia
    You put done your current salary, as they will usually check your previous three months income to ensure the figures add up... keep in mind if you take the loan now then you will need to start repaying now, so only your current salary is relevant
    • benbay001
    • By benbay001 8th Aug 19, 10:33 PM
    • 82 Posts
    • 64 Thanks
    benbay001
    You put done your current salary, as they will usually check your previous three months income to ensure the figures add up... keep in mind if you take the loan now then you will need to start repaying now, so only your current salary is relevant
    Originally posted by Bermonia
    When the salary ive stated, doesnt match whats been going in, do they decline, or ask for proof?
    • ffacoffipawb
    • By ffacoffipawb 8th Aug 19, 11:19 PM
    • 2,867 Posts
    • 1,987 Thanks
    ffacoffipawb
    When the salary ive stated, doesnt match whats been going in, do they decline, or ask for proof?
    Originally posted by benbay001
    Careful in case you get a CIFAS marker for loan fraud.
    Retired: Financial Independence achieved in June 2019.

    Cofiwch Dryweryn
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