best deal on a £25,000 loan?
Discussion
hi there.
looking at getting an unsecured car loan for £25,000. i have a perfect credit history but due to only being with first direct for a few months they aren't willing to lend to me at all. looking for a good apr% over two years with someone who will provide not too much hassle.
bit frustrating really as i was with barclays for something like 12 years then alliance and leicester for a few years and they were literally throwing loans at me when i was with them.
i understand the current financial climate has changed banks attitudes to unsecured loans and i am not bashing first direct for sensible lending as i think that would have saved alot of hassle if instigated years ago.
looking for as close to the £25,000 mark but willing to go lower.
many thanks in advance.
looking at getting an unsecured car loan for £25,000. i have a perfect credit history but due to only being with first direct for a few months they aren't willing to lend to me at all. looking for a good apr% over two years with someone who will provide not too much hassle.
bit frustrating really as i was with barclays for something like 12 years then alliance and leicester for a few years and they were literally throwing loans at me when i was with them.
i understand the current financial climate has changed banks attitudes to unsecured loans and i am not bashing first direct for sensible lending as i think that would have saved alot of hassle if instigated years ago.
looking for as close to the £25,000 mark but willing to go lower.
many thanks in advance.
Wacky Racer said:
Borrowing £25,000 Unsecured against a depreciating "asset" like a car in today's climate will not be easy, be prepared for a lot of rejections before you get fixed up.
I thought it sounded a bit mad too but then thought it might be a once-in-a-lifetime opportunity on a classic, in which case the OP will need to find someone who understands the classic car market (one of the few investments left relatively untouched by the crash). Does Adrian Flux do loans? Wacky Racer said:
Borrowing £25,000 Unsecured against a depreciating "asset" like a car in today's climate will not be easy, be prepared for a lot of rejections before you get fixed up.
Clearly, as you're borrowing unsecured you're not borrowing against anything at all. 
Money supermarket suggests Tesco Finance will do £25k over 2 years at 8.4%. Repayments of £1,131.74 a month suggest that you're earning enough that they should be happy to lend you the cash. Well, that or you're spending all of your income on a car, in which case you can look forward to lots of rejections.I think people are over complicating this.
The purpose of the loan is almost irrelevant as it's unsecured. The companies providing the loan won't car if your buying a car or brass buttons. It's your past payment behaviour against your projected future ability to repay the loan.
As a rough rule of thumb, don't ask to borrow more than 75% of your annual income.
£25k over two years seems like a big commitment, you might have more luck asking for it over a longer period (therefore reducing the monthly payment) to reduce the affordability impact. You could still save the difference between the two terms and look to pay it off early e.g;
Two years = £1200 pm
Four Years = £600 pm
Pay the £600 pm and save the other £600pm into an ISA or the like, with a view to settling the loan early at around the two year point..................
The purpose of the loan is almost irrelevant as it's unsecured. The companies providing the loan won't car if your buying a car or brass buttons. It's your past payment behaviour against your projected future ability to repay the loan.
As a rough rule of thumb, don't ask to borrow more than 75% of your annual income.
£25k over two years seems like a big commitment, you might have more luck asking for it over a longer period (therefore reducing the monthly payment) to reduce the affordability impact. You could still save the difference between the two terms and look to pay it off early e.g;
Two years = £1200 pm
Four Years = £600 pm
Pay the £600 pm and save the other £600pm into an ISA or the like, with a view to settling the loan early at around the two year point..................
Its not quite linear as there is two years more interest to add so more like £610 a month over four years and £1130 over 4, using the tesco example. And remember if you repay early you will in effect pay a penalty (they cant call them penalties but in effect you will not get all your interest rebated) but i agree - better to take a slightly longer period with payments you are comfortable with. I have heard good things about performance car finance who are a broker for that type of stuff but have never used them personally.
(Brit in the US)
Do your banks not offer lines of credit.
Set up a line of credit, get a cheque book, pay P & I on drawn amount.
Very flexable.
Amount dependent on equity in home and assets generally.
Home equity loan, fixed amount, fixed repayment sched.
Amount dependent on house equity.
If you can somehow get a secured loan you will same thousands.
Classic car sellers in the States do offer financing, often up to 7 years !
In theory a classic car should depreciate at a lower rate than a new car, so it is not completly crazy.
Ask classic insurers, they would know who often pops up as the "other owner"
Do your banks not offer lines of credit.
Set up a line of credit, get a cheque book, pay P & I on drawn amount.
Very flexable.
Amount dependent on equity in home and assets generally.
Home equity loan, fixed amount, fixed repayment sched.
Amount dependent on house equity.
If you can somehow get a secured loan you will same thousands.
Classic car sellers in the States do offer financing, often up to 7 years !
In theory a classic car should depreciate at a lower rate than a new car, so it is not completly crazy.
Ask classic insurers, they would know who often pops up as the "other owner"
Sarnie said:
I think people are over complicating this.
The purpose of the loan is almost irrelevant as it's unsecured. The companies providing the loan won't car if your buying a car or brass buttons. It's your past payment behaviour against your projected future ability to repay the loan.
This is what I was trying to say, but more succinctly! Interesting point about the four year/two year things too - over four years the APR is likely to be lower, but check the penalties for early repayment as mentioned. Barclays charge 30 days interest (or at least they used to, not sure about now!), others may vary - I've no idea of this is typical or not...The purpose of the loan is almost irrelevant as it's unsecured. The companies providing the loan won't car if your buying a car or brass buttons. It's your past payment behaviour against your projected future ability to repay the loan.
Would you not consider getting a secured loan? The APR should be more competitive and there aren't usually early repayment charges.
Unsecured loans is a two tiered market at the moment: High St banks/Supermarkets lend between 8-13% (approx) and then private lenders (in as much as there are any left) start at 22% and go up to 75% and similarly ridiculous rates. You can get a secured loan for 9.9%
Unsecured loans is a two tiered market at the moment: High St banks/Supermarkets lend between 8-13% (approx) and then private lenders (in as much as there are any left) start at 22% and go up to 75% and similarly ridiculous rates. You can get a secured loan for 9.9%
otolith said:
Perhaps I'm out of touch, but 9.9 sounds high for unsecured and rapacious for secured? I'd have thought someone with a good credit score should be able to get high sevens unsecured?
I regret to say you are out of touch, my friend. The market has gone nuts in 2010 and despite the fact we have record low BoE rates, it has never been more expensive to borrow. The best unsecured deal on the market just now is (I think) 7.9% from Sainsbury's bank. Needless to say they are quite picky about who they lend it to. High street banks are queuing up around the 10% mark to lend you cash - even for perfect credits! - and of you have any blemish on your record the the market starts above 20% for you.Secured lending starts at 9.9% but with fees etc the APRs are in the low teens at best.
Tough times!
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