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  • FIRST POST
    • Thunderbug
    • By Thunderbug 9th Feb 18, 12:30 PM
    • 1Posts
    • 1Thanks
    Thunderbug
    Why wont people give me a loan?
    • #1
    • 9th Feb 18, 12:30 PM
    Why wont people give me a loan? 9th Feb 18 at 12:30 PM
    I have started my new job just finished probation period and wanted to treat myself to a new car to make getting to work easier and more comfortable.

    I go on compare the market, put in my details income, dependants etc. Ah good all these companies want to give me the loan at a nice low interest rate. which is what I would expect.

    Click apply on the top one, I fill in a thing again, they ask me all the info, income outgoings, dependants etc. To sum it up i'm getting 2k a month after tax and have no outgoings whatsoever, i live with parents so no mortgage, my current car is paid for, my insurance is a staggering 30 a month, I dont have any kids, I dont have any other loans. I have plenty of spare cash and I can easily afford the repayments (450 aprx a month). Oh and im young, healthy and not likely to be unable to pay it back due to not being alive.

    I would think im literally the best person to give a loan too. But they wont? What gives? Whats the point in compare the market?
    Last edited by Thunderbug; 09-02-2018 at 12:34 PM.
Page 1
    • bigisi
    • By bigisi 9th Feb 18, 12:35 PM
    • 125 Posts
    • 225 Thanks
    bigisi
    • #2
    • 9th Feb 18, 12:35 PM
    • #2
    • 9th Feb 18, 12:35 PM
    You don't mention what other credit you have but this could possibly be affecting your applications.

    Do you have credit card debt? If you have no credit at all and have never had any you will have little credit history for the lenders to base their decision on so they minimise their exposure to risk by just declining you. You need to check your credit report and see what's on there but be prepared for no "quick fix" to this, building or repairing (depending on which is required) credit history takes time.
    • kerri gt
    • By kerri gt 9th Feb 18, 12:36 PM
    • 6,991 Posts
    • 49,172 Thanks
    kerri gt
    • #3
    • 9th Feb 18, 12:36 PM
    • #3
    • 9th Feb 18, 12:36 PM
    Conversely a lack of credit history can be detrimental as a bad credit history since lenders have nothing to see how you managed existing or past credit. There is advise on here about building up a credit history - such as a monthly mobile contract.

    However if you have no outgoings at all (I suspect this isn't actually the case unless you never go out, live rent free and never buy anything) then why would you not be able to afford a new car outright or save up for one rather than taking out a loan?
    Feb 2015 NSD Challenge 8/12
    JAN NSD 11/16


    • littlekellysmum
    • By littlekellysmum 9th Feb 18, 12:42 PM
    • 2 Posts
    • 1 Thanks
    littlekellysmum
    • #4
    • 9th Feb 18, 12:42 PM
    • #4
    • 9th Feb 18, 12:42 PM
    You need to build a credit history. Perhaps get a landline or contract mobile phone, show some history that you paid on time. You will get a loan. All the best.
    • spadoosh
    • By spadoosh 9th Feb 18, 12:50 PM
    • 5,072 Posts
    • 6,830 Thanks
    spadoosh
    • #5
    • 9th Feb 18, 12:50 PM
    • #5
    • 9th Feb 18, 12:50 PM
    3 month probationary period. Assuming what youve said and you dont spend anything youve already got 6k sat around.

    Why mess about with the expense of borrowing if you can save for half a year and buy outright?
    Don't be angry!
    • dealer wins
    • By dealer wins 9th Feb 18, 12:54 PM
    • 5,744 Posts
    • 10,885 Thanks
    dealer wins
    • #6
    • 9th Feb 18, 12:54 PM
    • #6
    • 9th Feb 18, 12:54 PM
    Save up and buy your new car.

    Quite often you will be more hesitant spending thousands on a new car when its coming out of your savings rather than a loan!!
    Choose life
    • Candyapple
    • By Candyapple 9th Feb 18, 1:45 PM
    • 2,760 Posts
    • 2,090 Thanks
    Candyapple
    • #7
    • 9th Feb 18, 1:45 PM
    • #7
    • 9th Feb 18, 1:45 PM
    However if you have no outgoings at all (I suspect this isn't actually the case unless you never go out, live rent free and never buy anything) then why would you not be able to afford a new car outright or save up for one rather than taking out a loan?
    Originally posted by kerri gt
    Why mess about with the expense of borrowing if you can save for half a year and buy outright?
    Originally posted by spadoosh
    Because a lot of people like to drive around in cars that they would never normally be able to purchase with savings / too much of the 'want it now' culture and don't want to save for a few months/years to own outright. By putting them on finance, they get to drive the latest high end models fooling themselves that the car is affordable with their monthly repayments with little thought of what they would do if they got ill/lost their job/saving for the future etc.

    OP you need to read this thread:
    http://forums.moneysavingexpert.com/showthread.php?t=5746050&highlight=lesson


    Your eligibility is not solely based on one factor; any combination of the following factors might be taken into consideration:

    - amount of existing debt
    - amount of existing available credit
    - history of settled accounts
    - history of incurring defaults
    - number of recent applications for credit
    - age
    - whether single, married, widowed, separated or divorced
    - whether home-owner, tenant or living with parents
    - whether you're on the electoral register
    - current employment status
    - length of time with current employer
    - salary

    This is by no means an exhaustive list and how each credit-provider assesses you is different; some companies may not consider many of these factors, some may consider even more. Certain factors may not carry any weight and some might dictate the decision-making process completely - you'll never know.

    There is no one rule and the only way you'll know is if you apply and are accepted; ultimately, it's up to each company whether they want to give you a loan or not and on what terms. They have no obligation to lend to anyone nor explain or justify their lending criteria.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • Mahsroh
    • By Mahsroh 9th Feb 18, 1:56 PM
    • 339 Posts
    • 330 Thanks
    Mahsroh
    • #8
    • 9th Feb 18, 1:56 PM
    • #8
    • 9th Feb 18, 1:56 PM
    With the limited info, lack of credit history may be a key factor I would guess.


    I'm no expert, but perhaps the lender is looking at it from a point of view that your circumstances are likely to change too. How long is the loan? 3years? 5years? You can afford the repayments now because you still live with your parents. But, will this still be the case in three years time? Just a thought.....
    • dresdendave
    • By dresdendave 12th Feb 18, 5:18 PM
    • 732 Posts
    • 905 Thanks
    dresdendave
    • #9
    • 12th Feb 18, 5:18 PM
    • #9
    • 12th Feb 18, 5:18 PM

    To sum it up i'm getting 2k a month after tax and have no outgoings whatsoever.......

    .........my insurance is a staggering 30 a month,
    Originally posted by Thunderbug
    Unless mummy and daddy are paying your insurance, there seems to be a contradiction in the quoted sentences.
    • AstroTurtle
    • By AstroTurtle 12th Feb 18, 5:28 PM
    • 130 Posts
    • 492 Thanks
    AstroTurtle
    You haven't said how much you are trying to borrow 10k / 15k / 20k / 30k


    Even at a 2k income 450per month for a car is a large amount and lenders may just not be comfortable with that.
    • takman
    • By takman 13th Feb 18, 9:15 AM
    • 3,269 Posts
    • 2,863 Thanks
    takman
    I have started my new job just finished probation period and wanted to treat myself to a new car to make getting to work easier and more comfortable.

    I go on compare the market, put in my details income, dependants etc. Ah good all these companies want to give me the loan at a nice low interest rate. which is what I would expect.

    Click apply on the top one, I fill in a thing again, they ask me all the info, income outgoings, dependants etc. To sum it up i'm getting 2k a month after tax and have no outgoings whatsoever, i live with parents so no mortgage, my current car is paid for, my insurance is a staggering 30 a month, I dont have any kids, I dont have any other loans. I have plenty of spare cash and I can easily afford the repayments (450 aprx a month). Oh and im young, healthy and not likely to be unable to pay it back due to not being alive.

    I would think im literally the best person to give a loan too. But they wont? What gives? Whats the point in compare the market?
    Originally posted by Thunderbug
    So if that is true then why do you not have a large amount of savings built up if you have so much spare cash?. If you do then simply use that money to buy the car.
    • JReacher1
    • By JReacher1 13th Feb 18, 12:31 PM
    • 2,736 Posts
    • 3,791 Thanks
    JReacher1
    You need a decent credit history if you are asking for a large loan. I am guessing you are after 10-15K and it doesn't sound like you have much of a credit history so companies will be reluctant to lend you such a large sum of cash.

    It is not very money saving but have you considered leasing a new car? It could be a good option for you
    • Catsacor
    • By Catsacor 14th Feb 18, 6:52 AM
    • 37 Posts
    • 37 Thanks
    Catsacor
    Because a lot of people like to drive around in cars that they would never normally be able to purchase with savings / too much of the 'want it now' culture and don't want to save for a few months/years to own outright. By putting them on finance, they get to drive the latest high end models fooling themselves that the car is affordable with their monthly repayments with little thought of what they would do if they got ill/lost their job/saving for the future etc.

    OP you need to read this thread:
    http://forums.moneysavingexpert.com/showthread.php?t=5746050&highlight=lesson


    Your eligibility is not solely based on one factor; any combination of the following factors might be taken into consideration:

    - amount of existing debt
    - amount of existing available credit
    - history of settled accounts
    - history of incurring defaults
    - number of recent applications for credit
    - age
    - whether single, married, widowed, separated or divorced
    - whether home-owner, tenant or living with parents
    - whether you're on the electoral register
    - current employment status
    - length of time with current employer
    - salary

    This is by no means an exhaustive list and how each credit-provider assesses you is different; some companies may not consider many of these factors, some may consider even more. Certain factors may not carry any weight and some might dictate the decision-making process completely - you'll never know.

    There is no one rule and the only way you'll know is if you apply and are accepted; ultimately, it's up to each company whether they want to give you a loan or not and on what terms. They have no obligation to lend to anyone nor explain or justify their lending criteria.
    Originally posted by Candyapple




    Please Mods, make this text a Sticky at the top of the Loan/Eligability sub forums !
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