Loan Advice

Kill_Phil

Kill_Phil

Kill_Phil

Soldato
Joined
11 Feb 2010
Posts
3,195
Location
England
Hey guys, i want to take a loan out to purchase a newish car as my old one has given up. Now im after a 5k loan and im looking to repay it over 24 months. Ive waited patiently for 3months of wages (£1300 after tax) to go into my bank from my new job, (did also have a job before this paying £800 after tax).However ive gone into my bank today, and ive been quoted 16.9% apr (without running credit checks), which seems fairly dam high.

im considering about applying to other places, particularly tescos, but im worried about by non-existent credit rating (im only 24). since I've left uni all ive had is a mobile phone contract which ive managed to keep on top of.lived at current address for 20 years and im on the electoral role. obviosuly i dont want to run the risk of applying/getting turned downand , to these other places, that have no show of my income, and ruining my credit rating. so do i

A) run the risk and apply to these other firms (tesco typical apr 8.7)?

B)apply with my trusted bank at typical 16.9?
 
The less you borrow the more APR you tend to pay - the best deal for loans up to £4999 is somebody like Sainsburys at a staggering 12.9% APR. But once you get to £5k, you 9% or so is acheivable.

Bear in mind these are APR Typical. That means the typical customer with a decent credit rating gets this rate. The actual rate depends on your credit rating. At 24, with what you say is a non existent rate you might find it hard to get a decent rate.

Some figures for you.

At 16.9% APR you will pay about £250 a month.
At 9% APR you will pay about £230 a month.
 
You are MAD if you take a loan at 16.9% APR. Completely MAD.

The monthly repayments on £5k over 2 years will be pretty high. £350pcm?

If your take home is £1.3k pcm, and you have all the usual living expenses, such as rent, bills, etc, I think you're overextending yourself particularly when you're going to have the added cost of maintenance, insurance etc.

Be sensible and buy something like a Mondeo for £1k. You'd be financially foolish to take out a £5k car loan + on costs.
 
no committments live with parents and seems to continue that way after recently splitting with the long term mrs :(

i have about £100 week committments atm with board,phone,and insurance/petrol


and 16.9 is coming out at £245 mark but if i get closer to the 8.7 mark would reduce it by about £20-£25 which is a lot of 2 years...
 
There's plenty of comparison sites. Money saving expert might be a good start.
Banks seldom offer good rates on loans.
Trusted bank? Lol.

Just look for a good rate with a known company. And make sure you are able to pay- missed payments will cost you a lot, regardless of who you go with.
 
I guess not, lol! It's been a long day.
Shop around, vary the terms between length of time and as said, experiment with borrowing a bit more or a bit less than you need, you will soon get a feel for what's competitive when looking at quotes.
 
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