Loans - Some Questions

RedTen · 17 Jul 2009 at 17:52

Hey,

I just need some help with a few loan questions if anyone could help..

I'm 18 I have a secure income, more than likely rising within a couple of weeks due to a promotion. (20k+) No mortgage and live at home with parents.

I'm looking to borrow around 6-7k. Over 3-5 years.

What I'm worried about is my credit rating. Not because i've abused it or missed payments etc but because i've not been able to build it up. All i have contract wise is my o2 iphone.

Am i going to be penalised massively due to this? Tesco have a base APR of 8% which to me sounds good. I'm tempted to go through the process of application to see what they offer me but will this affect my credit score further if im rejected?

Are there companys out there that lend to younger people and actually take income and outgoings into consideration?

Is there anyone around my age with a loan, what type of deal did you get?

Thanks for any help!

stokecity_m · 17 Jul 2009 at 17:55

Try your bank - i know when i wanted a loan many years ago before i had a credit his troy, because the bank could see my income etc they didn't even do a credit check on me.

RedTen · 17 Jul 2009 at 17:57

I have looked at my bank. I'm just put off by their higher rate. (12.9%)

I guess if its my only option i'll have to cough up but we'll see..

£7000 over 5 years =

Tesco - £8571

Natwest - £9,381.00

stokecity_m · 17 Jul 2009 at 17:59

mrsnowman said:
I have looked at my bank. I'm just put off by their higher rate. (12.9%)

I guess if its my only option i'll have to cough up but we'll see..

some banks might lower that if you haggle

got mine down for 8.9 to 6.9.

memphisto · 17 Jul 2009 at 18:01

12.9% is not that high of a rate in these circumstances in all honesty, especially if you have little to no credit rating as per you only having a mobile phone.

but to answer your questions, you will be penalised with a higher interest rate because you have little to no credit rating.

in regard to tesco, yes it would affect yer credit rating if you were rejected, it will also affect your credit rating if you have too many searches done on you in a short time.

you can however minimise the affect of APR, by overpaying your loan, so if your bank allows free adhoc payments on your loan than you can reduce the total amount of interest charged and possibly the term of the loan by making additional payments to the loan.

RedTen · 17 Jul 2009 at 18:02

memphisto said:
you can however minimise the affect of APR, by overpaying your loan, so if your bank allows free adhoc payments on your loan than you can reduce the total amount of interest charged and possibly the term of the loan by making additional payments to the loan.

Ah yes, i had forgetten to ask this. I might see if i can talk to one Natwests advisors in branch. They always seem nice enough..

memphisto · 17 Jul 2009 at 18:04

mrsnowman said:
Ah yes, i had forgetten to ask this. I might see if i can talk to one Natwests advisors in branch. They always seem nice enough..

oh and whatever you do dont ake loan protection

unless of course you want to

RedTen · 17 Jul 2009 at 18:06

Isn't loan protection one of those bank scams? Im sure i read that somewhere..

I also forgot to ask, does having a loan increase your credit rating? I would assume it does.

memphisto · 17 Jul 2009 at 18:43

mrsnowman said:
Isn't loan protection one of those bank scams? Im sure i read that somewhere..

I also forgot to ask, does having a loan increase your credit rating? I would assume it does.

its not a scam as such but is as close o in some cases, and yes aking the loan will increase yer credit rating