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Getting a loan

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
I want to get a loan for a car but don't have any credit history, is this going to hold me back?

I want to borrow £6000. The car I want is about £3000, then I will pay my insurance off in full, buy TAX and what ever else I need then hope to use the rest to pay of my student overdraft which is £2000.

I don't have a credit card or store cards all I have is my student overdraft. I have a full time permenant job although I've only been working there for 6 months and before this was a full time student. I live at home and don't have anything like a mortgage etc

Is this going to hold me back and I'm going to have to wait another few months beofre they will even consider me?

I'm not very good with all this kind of thing :/ Am going to go to the bank later to speak to them and get a bit of advice too

Comments

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Don't use debt to pay off debt, unless the loan is going to be cheaper than the overdraft. Even then, i would think, that an overdraft is better than a loan. You don't have to pay it off by a certain time, like you would with a loan.

    As far as getting the loan goes. I dunno, but you're already £2k in debt that'd go against you i'd assume.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I wouldn't use a loan to pay off an overdraft as its likely to be alot higher interest.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Thanks everyone.

    Spoke to the bank and sorted a graduate loan got £6000, so it's £189 a month for 3 years. Paid off £1000 of my over draft already so have £5000 for a car, insuarance, tax and anything else I'll need :)
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Overdraft interest is more expensive than loan interest.

    When assessing a loan application, banks use the acronym PARSERS (or variant):

    i) Person - is the person 18, earning money and has a good credit history
    ii) Amount - how much
    iii) Reason - for what
    iv) Security - what are you offering as security for the loan, generally for smaller amounts, they're unsecured
    v) Earnings - how much the bank can earn from you via interest charges
    vi) Repayment - term of the loan and interest
    vii) Services - can they cross-sell anything on the back of the loan, savings account, PPI etc.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Do you need to spend that much?

    I got a £7k loan for a car and regret it. Never had a problem paying but I just do not like being committed to it, nor would I pay it off if i was to sell my car, I just cannot wait for it to be over with.

    I'm not saying don't do it but just be 100% sure, it's a big commitment tbh
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Dinted wrote: »
    Do you need to spend that much?

    I got a £7k loan for a car and regret it. Never had a problem paying but I just do not like being committed to it, nor would I pay it off if i was to sell my car, I just cannot wait for it to be over with.

    I'm not saying don't do it but just be 100% sure, it's a big commitment tbh

    The 2 cars I am looking at are £3000 and £2300, I want a decent'ish car to last me a while and if I change my job and become a community nurse I will need a decent car. I don't expect to buy another car for a good few years after this!
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