Loan Trouble

[money]

recently I had a car on hire purchase with a balance of £16,000 remaining and wanted to sell it. Therefore, I took out a loan with Tesco for the balance of £16,000 and paid off the remaining finance. Following this I sold the vehicle for £16,000 and paid off the loan right away however now when applying for car finance or loan to purchase another vehicle I am finding it difficult to get accepted anywhere. Is this due to recently taken out alone and therefore the credit agencies are cautious? Is there anything else that I can do?

 

[Diddums]

Gotta be more to it than that, download the Experian, Credit Karma and Clearscore apps. Sign up to them and see what they say.

 

[Scort]

recently I had a car on hire purchase with a balance of £16,000 remaining and wanted to sell it. Therefore, I took out a loan with Tesco for the balance of £16,000 and paid off the remaining finance. Following this I sold the vehicle for £16,000 and paid off the loan right away however now when applying for car finance or loan to purchase another vehicle I am finding it difficult to get accepted anywhere. Is this due to recently taken out alone and therefore the credit agencies are cautious? Is there anything else that I can do?

It can take many weeks for your credit file to be updated - so if you've only just paid it all off, that will be the likely reason.

 

[Zefan]

As well as the above, stop applying to anywhere for any finance until you work out what's going on, it will only make your situation worse.

 

[OldKitMan]

It's also possible that it shows you paid off a loan straight away, the lender probably lost money on that so that will be part of the scoring criteria used by potential lenders when assessing the application. As others have mentioned as well it's quite possible that both loans or one of the loans still show as outstanding as well as the additional hard searches that have taken place.

 

[Gray2233]

As well as the above, stop applying to anywhere for any finance until you work out what's going on, it will only make your situation worse.

This.

If you get refused by somewhere it's good practice to stop applying, it's an automatic red flag to loan/finance companies as it indicates desperation.

 

[[FnG]magnolia]

Username + post content = HI SCORE

 

[Gray2233]

Username + post content = HI SCORE

You're not wrong, but there's a grand old problem of people searching the interwebs for the sort of problems described in the OP with zero resolution or good advice. I legitimately feel it's better to simply give positive input to those who might find this sort of thing via a search engine rather than turning the internet into a bunch of dead ends.

Old sod mode engaged I know, but there's so much positive data going the way of the dodo due to the transition to poor information retention/searchable related social media (Discord, Twitter, etc) over forums. OCUK is part of a dying breed in that regard imo, there's a few other specialist forums out there but they're slowly dying out in favour of worse long term experiences.

 

[[FnG]magnolia]

You're not wrong, but there's a grand old problem of people searching the interwebs for the sort of problems described in the OP with zero resolution or good advice. I legitimately feel it's better to simply give positive input to those who might find this sort of thing via a search engine rather than turning the internet into a bunch of dead ends.

Old sod mode engaged I know, but there's so much positive data going the way of the dodo due to the transition to poor information retention/searchable related social media (Discord, Twitter, etc) over forums. OCUK is part of a dying breed in that regard imo, there's a few other specialist forums out there but they're slowly dying out in favour of worse long term experiences.

I agree

 

[money]

Thanks for your help all, I did check credit reports, it says I’m using 40% of my limits which I don’t think is that bad tbh, it drops each month obviously with my payments for other items. I guess it’s a waiting game! Annoyed that I’m no without a car for a month or so until it all updates

 

[tom_e]

Thanks for your help all, I did check credit reports, it says I’m using 40% of my limits which I don’t think is that bad tbh, it drops each month obviously with my payments for other items. I guess it’s a waiting game! Annoyed that I’m no without a car for a month or so until it all updates

They generally advise not to go over 25% IIRC and I wouldn't bank on it magically being fine in a month due to lag in updating and the fact companies use their own criteria not just what we can see on the credit report sites.

 

[money]

They generally advise not to go over 25% IIRC and I wouldn't bank on it magically being fine in a month due to lag in updating and the fact companies use their own criteria not just what we can see on the credit report sites.

It’s a strange one, I have 100% acceptance on credit cards over £20k yet a loan is showing 0% whole thing is very confusing

 

[ShiWarrior]

If your desperate for a car, then just get a 2k car for now, use it for a year or 2, sort your finances out then you'll be in a stronger position to get a more expensive car

 

[money]

If your desperate for a car, then just get a 2k car for now, use it for a year or 2, sort your finances out then you'll be in a stronger position to get a more expensive car

Going from a 2022 BMW 530e to a 2k car is not an option for me I’ll walk before I buy a 2k car , however, I’m more looking for an alternative solution or understand as to why it’s now a blocker when it never has been in the past. Is it due to having a loan for the £16k and finance showing for £16k at the same time? Will it update its self to zero within a month or so? Or can this process take a year?

 

[Kill_Phil]

It’s a strange one, I have 100% acceptance on credit cards over £20k yet a loan is showing 0% whole thing is very confusing

How much are you looking to be loan? Unclear why you'd effectively have 16k in your pocket but then clear off the loan and look to take out another?

 

[d_brennen]

How much are you looking to be loan? Unclear why you'd effectively have 16k in your pocket but then clear off the loan and look to take out another?

After selling as well. There is something missing here I think

 

[money]

car had £16k remaining in finance.
Personal Loan taken £16k
Paid remaining finance £16k
Sold car
Paid loan £16k with money from sales of the car.

So nothing owing anywhere, if I knew this was going to happen I would have kept the £16k in my pocket and paid the loan monthly and just added funds to buy another car.

 

[OldKitMan]

Maybe it was dealer finance so the OP wasn't the owner, taking a personal loan to pay off the finance would make them the owner and make it easier to sell as a personal loan isn't 'outstanding finance' on a car.

 

[d_brennen]

car had £16k remaining in finance.
Personal Loan taken £16k
Paid remaining finance £16k
Sold car
Paid loan £16k with money from sales of the car.

So nothing owing anywhere, if I knew this was going to happen I would have kept the £16k in my pocket and paid the loan monthly and just added funds to buy another car.

In that case it'd take a month or two to settle out on your credit profile, not every entity reports on the same date etc. Applying and getting knocked back would also show and may have a negative effect... Sign up to one of the usual credit profiling companies as above.

 

[Kill_Phil]

car had £16k remaining in finance.
Personal Loan taken £16k
Paid remaining finance £16k
Sold car
Paid loan £16k with money from sales of the car.

So nothing owing anywhere, if I knew this was going to happen I would have kept the £16k in my pocket and paid the loan monthly and just added funds to buy another car.

Not sure why you just didn't do this in the first place. Most folks know not to take out multiple lines of credit in quick succession.

Probably best letting things catch up on the reporting side