Settling old loan before applying for new loan - how long to wait?

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AK4LH
AK4LH Posts: 15 Forumite
in Loans
Hi,

I currently have a loan for a car that I've had for about 3 years, the car is worth about £500-800 more than the current settlement figure. I am looking to buy a new car with a new loan, but I'm wondering about how long I would need to wait from settling the old loan to applying for the new, as I don't want to be without a car for too long!

If I settled my existing loan on Monday for example, would it show up to the new loan company the next day that it is settled or does it take time to appear on my record, and if I applied the very next day would the new bank still think I had the outstanding debt?

Sorry for the essay, there doesn't seem an easy way to explain what I mean!

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  • System
    System Posts: 178,094 Community Admin
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    Where are you getting the car valuation from, what they're asking for on Ebay? Asking and getting are two wildly different things. Click the button in the left hand column for "Sold" and you'll see what they're actually selling for. Also if you are going to trade the car in or use something like we buy any car you'll get a below market price offer.

    As for the settlement, it can take a few weeks to show up on your credit record.
  • AK4LH
    AK4LH Posts: 15 Forumite
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    Don't worry about the car valuation, I'm good for that as I've just taken the lowest value of the same car on Autotrader / Pistonheads and I'm still well in positive equity by a good £500. I've always done this in the past and it has worked for me.

    With regards to the settled loan, I'm amazed it takes that long to appear on the credit record since changes in bank balance and credit card balances are accurate to the day. That's a shame!
  • sourcrates
    sourcrates Posts: 28,883 Ambassador
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    AK4LH wrote: »
    .
    With regards to the settled loan, I'm amazed it takes that long to appear on the credit record since changes in bank balance and credit card balances are accurate to the day. That's a shame!


    Noddle can take up to two months to update, most other CRA update on a monthly basis.
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  • AK4LH
    AK4LH Posts: 15 Forumite
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    sourcrates wrote: »
    Noddle can take up to two months to update, most other CRA update on a monthly basis.

    I agree that they refresh every month but the balances they seem to show seem to be accurate on the dates they refresh, if you know what I mean. From my experience anyway, I'm by no means an expert!
  • whambar
    whambar Posts: 39 Forumite
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    When I did similar I applied for new car loan with my bank a week or so before so still had Tesco loan as active- my thought process being if it was a decline I know not to sell old car and be careless. New loan approved and in my account before the browser closed and despite still having original loan I still got the headline rate of 3.1% back then. This left me free to confidentially place deposit on new car and sell old car - funds on which covered original loan. Loans seem to update month after the activity so my credit report reflected a closed and settled account at end of month after I paid it off
  • AK4LH
    AK4LH Posts: 15 Forumite
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    whambar wrote: »
    When I did similar I applied for new car loan with my bank a week or so before so still had Tesco loan as active- my thought process being if it was a decline I know not to sell old car and be careless. New loan approved and in my account before the browser closed and despite still having original loan I still got the headline rate of 3.1% back then. This left me free to confidentially place deposit on new car and sell old car - funds on which covered original loan. Loans seem to update month after the activity so my credit report reflected a closed and settled account at end of month after I paid it off

    Thanks Whambar, I think I just need to let my credit score get back to where it was (opened a new bank account and had a new mortgage within last few months) before applying to make sure I get the rate I want, think I'm maybe being a bit impatient!
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    AK4LH wrote: »
    Thanks Whambar, I think I just need to let my credit score get back to where it was

    Don't do that. It may never happen if the random generator keeps throwing up low numbers.

    Just wait until your credit file shows a picture that lenders would feel comfortable with. If showing that the loan is cleared is all you need, then that's when you could apply.
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