Tried searching because I remember a similar thread but being a football forum, the term Loan gets used alot..
Anyway, I want to take out 5K so I can get my next car and a few other bits n bobs.
Thing is I am only 22 and never done anything like this before.
I had a look at Sainsbury's bank & got 60% chance of being approved.
I don't want to get rejected because I don't want to unnecessary get a bad credit rating just for the sake of a new car. I only really need the loan till I sell my current car anyway, just cant go without a car. Once I have the cash for that I plan on paying it off.
Why does being rejected even give you a bad credit rating? It's not like you've done anything, its only an enquiry at the end of the day?
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Buy a cheaper car till you have earnt enough for a better one.
Loans are a mugs game generally.
Better to cut your cloth to suit your purse.
It's not only a daily, but a hobby and long term project plan.
I am not concerned with my ability to pay back the loan itself. I am in a stable job and have practically zero responsibilities still living with the parents.
Also, just applying for credit does not harm your credit rating......even being turned down doesn't do too much harm. Credit rating is usually based on your credit HISTORY, ie , how good are you with repaying it ( have you missed any payments and if so how many), how much do you already owe in total etc etc.
I would agree that the best route would be you parents, esp as you still live at home. Do you currently pay them rent or housekeeping ?? If so, they know that you will pay them regularly & so could you ask them to lent you £5k and you pay them back every month with your housekeeping money.
hope this helps
Think of it (in very very simple terms) as a basis of -50 to 50, you start out at zero, however you gain points for paying bills on time moving you into the positives.
i.e your phone bill if on contract moves you upwards each time you pay it on time. however a quote for a loan passing would be a bigger push up or down let's say 5 points to every 1 point gained by paying your phone bill on time. a missed phone bill payment could be seen as minus 10 points.
The minus points for a loan rejection is based on a professional not believing you can pay off a sum that you think you can. Basically they're saying you don't know how much you can realistically afford.
I took out a similar size loan when I was 21, I have only just paid it off. Each time I got a pay rise I increased my pay off amount. in the end it wasn't as expensive as I was initially quoted and made the money easier to set by as I knew I couldn't spend £xxx that month. It's no different to purchasing on credit which I am sure some of the above have done themselves.
If you can afford the repayments and think it benefits you, go for it.
I would recommend starting off with a £3-4k loan first though as you'll pay less and be more likely to afford the repayments.
I recommend you also think about the fact that if you were to spend say £3-4K on a car, you'll also need to insure the bugger. Which no doubt you'd then have to do on credit unless you plan on using the loan to pay that off up front too?
If that is your plan just remember for the whole term of the loan you will be repaying your car insurance for the first year that you had to insure it.
I'd borrow as much from friends and family as you possibly can, then make up the difference with a 0% credit card if I were you.
Life is for the living
http://www.money.co.uk/credit-cards.htm
Tesco seem to be the only one doing it without a fee, with 12 months interest free. If that gives you the leeway & time to sell your car & pay off the loan MattD.
Personally, I agree with a few on here. I had a fair amount of debt when in my early 20s and took several years to pay it off. Decided then that I would save for whatever I wanted and no longer use credit cards or loans. if you possibly can, I recommend it.
A perfect credit score guarantees you nothing by the way. Living without credit cards, for example, gives lenders/stores less to judge your ability to repay on and you may find you are rejected anyway.
Like I say I will get 2k 2.5k for my current car. The reason I went for a 5k loan is because that's the point of less apr through Sainsburys. Also need about 4k so I can pay insurance outright.
After bills and boozing I still have about 500 quid to play with each month so not concerned about my ability to pay it back just need to convince be lenders!
Family loan is out of the question unfortunately and so is finance as its a private seller on a e46 330, not concerned about depreciation
Sorry for sounding a boring old fart, I would have gone for the car option at 22, if you asked me if I had my time again what would I do, I'd save like mad to get out, and get on the property ladder, but I know properties are well overpriced, and 1st time buying is a nightmare as you need a huge deposit.
I appreciate it sounds as though you have seen something at Sainsburys but i'd still recommend talking to your bank. I bank with Halifax and when I got a loan out recently online it was all pre-approved how much I could borrow. All I had to do was enter in how much I wanted and how long I wanted to pay it back for and as long as it wasn't something stupid like paying back £1,000 a month then Halifax would agree it there and then online. Not only that they also give you the option to take a month's 'holiday' twice through the duration of your loan if you have a tight month and extends the duration of it another month. And I also got the option to pay off my loan early with no added interest.
For reference i'm 33 y/o and had several loans, usually to pay for a car or other bits and bobs. So long as you know how much you can afford to pay back each month and if your job is secure enough then go for it. Sometimes it's the only option if you or your family don't have the funds but definitely see what your bank can offer.
I didnt 'find a deal' at Sainsburys so to speak. I did a 30 second loan search on the internet and Sainsburys was the first company I knew that came up. (Plus also worked for them).
I will take a look online see if I can find anything about being pre approved!