Buying a car with finance - Bank Loan

[Matt17121991]

Looking at buying a new car on fincance/bank loan. As my current car (106 gti) is literally falling to pieces now .

I was thinking of going down the bank loan route as I can borrow all the money and pay it back if I decide to sell the car after a couple years, or at least pay most of the loan back. Finance from a dealer would probably be more complex than that and generally cars are more expensive at a garage.

What would you recommend? How easy was it to get a loan? I don't own a home, but live with my mom and dad and want to get a decent car for a couple years before I think about moving out etc! I pay a credit card I have off in full every month so this should help?

Thanks!

 

[dsing]

I just bought mine with a bank loan rather than finance through the dealer. When looking at the terms, getting it through the dealer meant I had to get permission from the finance company to sell the car and I couldn't make any 'over payments' if I ever had any money to spare.

Getting the money from the bank saved a lot of hassle at the start and means I could potentially sell the car whenever I want and even pay off the loan early....!

Hope this helps.

 

[Matt17121991]

I just bought mine with a bank loan rather than finance through the dealer. When looking at the terms, getting it through the dealer meant I had to get permission from the finance company to sell the car and I couldn't make any 'over payments' if I ever had any money to spare.

Getting the money from the bank saved a lot of hassle at the start and means I could potentially sell the car whenever I want and even pay off the loan early....!

Hope this helps.

Yeah, just seems easier/better, to have a bank loan. Too many restrictions with finance from a garage in my opinion

 

[Crezzy]

How old are you? Loan ammount? How long have you had your credit card for and have you paid it off when asked to an not been late?

 

[Matt17121991]

I'm 20, 21 in december. Would look to borrow around £5000. Had my credit card for about 10 months and paid it off in full every month when it is due, not afterwards.

Problem is I don't know what loan to apply for, if I apply for a loan with a fair credit rating needed, I might be paying back more than I need to be as I might have a better than fair credit rating, if you understand me haha

 

[Chrisgti6]

You could always sign up to creditexpert.co.uk and get a credit report on yourself. This will show what your credit rating is like and they help to match you to the right sort of products.

 

[devilsadvocate]

If you have a regular salary going in and have done for a while then you should have no issue getting a 5k bank loan, even at your age....unless of course you have defaults or regularly missed payments etc.

You are more likely to get finance than a bank loan because the finance company have something to secure the loan money against, i.e the car whereas the bank are lending you X amount with no asset to take back in the event you stop paying.

Most banks do their lending based largely on your account history, such as a regular wages going in and not going over your overdraft limit etc.

I would get a bank loan as you are more likely to get a better interest rate and you will actually own the car... so to speak.

 

[Matt17121991]

No defaults or regularly missed payments. Any websites where I can just see my credit report? Instead of signing up for this 30 day trial rubbish, because I don't want to do that lol

 

[Rogue]

If u sign up to credit expert as suggested u can pay a fiver to get an instant credit score. Then cancel your membership.

 

[Matt17121991]

And that'll tell me pretty much everything I need to know?

 

[Rogue]

That'll tell you how good your score is. Obviously if it's "Very Good" the likely hood of you getting a loan is probable and at a good rate

 

[930Tech]

Do you have a phone on contract too?

That can help getting credit.

 

[deadmau5]

I was looking to get a credit card about 6 months ago. I applied for a Tesco credit card and got denied. I joined Experian to see my credit score and it was 99something. I had never had finance on anything before so maybe that's why they rejected me. I since got one from my bank (RBS) with a credit limit of £3.5k compared to the £1200 Tesco advertised.

 

[Matt17121991]

I have a phone on contract, but its in my dads name, comes out of my account that if that counts? Lol

 

[Jcs]

Make sure you research your loan the best you can. Money saving expert website is great for comparisons

I got a 2,5k loan with my bank last year for a new car. I wish I'd shopped around for a better deal and a lower interest rate as I got stung quite a lot.

If you can afford the repayments, I say go for it. pay on time etc and it'll build your credit score up which will help once you want a mortgage

 

[Matt17121991]

Yeah I'm just thinking of getting a fast ish/ decent car whilst I'm young, as in a couple of years ill be wanting a house and a family, so may aswell do it whilst I'm young still in my opinion.

 

[philmots]

Sainsbury's loans are one of the cheapest.

 

[Mike]

Serious piece of advice, go to your own bank first before trying other lenders - your credit score with your own bank will be a lot higher than with banks who don't have you as a customer. Your own bank can see how you conduct your finances so therefore they have more information on you than any other organisation who just use credit reference agencies.

 

[Jcs]

Agreed I was turned down for a credit card and loan through a few companies just becuase I had a low credit score.

Tried my bank, gave me both immediately

 

[Prestige Car Finance]

I just bought mine with a bank loan rather than finance through the dealer. When looking at the terms, getting it through the dealer meant I had to get permission from the finance company to sell the car and I couldn't make any 'over payments' if I ever had any money to spare.

Getting the money from the bank saved a lot of hassle at the start and means I could potentially sell the car whenever I want and even pay off the loan early....!

Hope this helps.

Your dealer may have not told you exactly how this works. Along as the agreement is regulated (which it will be unless its a variable rate or business agreement) you can pay of lump sums. You can also hand the car back to the finance company after 50% of the total amount payable has been made, even if the car is worth less. If you sell a car on finance then you have to inform them your selling the car to get a settlement figure. Hope this helps and Matt happy to answer questions if you want.