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Loan Advice

dinglebin Avatar
6y, 3m agoPosted 6 years, 3 months ago
Hi - We're looking to purchase a new car. We need to borrow £16k. If we borrow this as one loan the APR is around 8.5% with monthly repayments at £340. However if we apply for 2 individual loans the APR drops to 7.8% with 2 monthly payments equal to £333. The total amount we would pay back is also a good few hundred pounds cheaper using option 2. Am I allowed to take out 2 loans? One will be in my name and the other will be in my wifes name. I didn;t want to take loan 1 out and then realise that I wouldn't be allowed for some reason to take out loan 2. Thanks
dinglebin Avatar
6y, 3m agoPosted 6 years, 3 months ago
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Comments/page:
#1
Of course, you can go into banks seperately and ask for loan each for a new car each. Then spend it on the one car. But I would shop around as should be able to get a lower apr for a 8k loan.
#2
are they both from the same place? if so they may have an issue.

i always thought the more you borrow gives you a lower APR?
#3
pistol6000
are they both from the same place? if so they may have an issue.i always thought the more you borrow gives you a lower APR?

It seems to be that loans between 7500 and 14999 offer the better lower rate. Above this and the rate jumps.

I would be looking to take one loan from Sainsburys and one from Santander. Both offering 7.8%. I can't seem to better that anywhere unless someone knows of another lender??
#4
I spent 10 years working in the motor finance trade as an underwriter and have had many a conversation with motor dealers regarding APR's. If you mention to them that you have been offered a better deal through the bank they may be able to match it.

The lower the APR the dealer charges (and it is the dealer, not the finance house who states the rate*) the less commission they earn. However if you get the money from the bank they will earn no commission at all, so it's in their best interests to offer you the bank rate and make something. You may have to prove the rate you've been offered to them, and indeed prove you have been accepted for it, but some dealers will just match it.

Any further help required, send me a PM.

*Obviously they have a minimum rate they have to charge which has been set by the finance house, but whatever they charge over it they earn commission on. The minimum APR they have to charge is worked out on the age of the vehicle, the amount and the term of the loan.
#5
Scouser78
I spent 10 years working in the motor finance trade as an underwriter and have had many a conversation with motor dealers regarding APR's. If you mention to them that you have been offered a better deal through the bank they may be able to match it.The lower the APR the dealer charges (and it is the dealer, not the finance house who states the rate*) the less commission they earn. However if you get the money from the bank they will earn no commission at all, so it's in their best interests to offer you the bank rate and make something. You may have to prove the rate you've been offered to them, and indeed prove you have been accepted for it, but some dealers will just match it.Any further help required, send me a PM.*Obviously they have a minimum rate they have to charge which has been set by the finance house, but whatever they charge over it they earn commission on. The minimum APR they have to charge is worked out on the age of the vehicle, the amount and the term of the loan.

Hi thanks thats useful info. The guy is talking flat rates of 5% being the lowest he can go. That equates to approx 10% APR. The car is a 09 and I want to take the loan out over 5 years. You reckon I could squeeze him to match the 7.8% APR? That's about a 3.9% Flat rate. It would be sooo much easier for me to take the finance out with the dealer as I could drive away today!! Any advice would be great
#6
dinglebin
pistol6000
are they both from the same place? if so they may have an issue.i always thought the more you borrow gives you a lower APR?
It seems to be that loans between 7500 and 14999 offer the better lower rate. Above this and the rate jumps.I would be looking to take one loan from Sainsburys and one from Santander. Both offering 7.8%. I can't seem to better that anywhere unless someone knows of another lender??

been a few years since i applied for a loan (still payin em tho!!) and it seems to have changed that way! probably due to banks going under.

you should be fine with the 2 loans ,there the cheapest i can see. Or do as scouser78 says...unless your buying privatly
#7
If you mention that you are thinking of going to the bank for a better rate it can go one of two ways.

1. He will get the hump and drag the deal out as he's not earning any extra commission on the deal he's worked in getting.

2. He will match it.

So it's up to you really. I think 5% flat is just above average for that age of car, however I've been out of the motor trade for over a year now and it may have increased with the way banks are at the minute.

There's no problem with letting him know you may look for a loan, he may offer you a reduced rate just to keep you from approaching the bank.
#8
We're looking to purchase a new car. We need to borrow £16k

And this why the financial crisis continues. Do you REALLY need 16k for a new car???
#9
Dantooine
We're looking to purchase a new car. We need to borrow £16k


And this why the financial crisis continues. Do you REALLY need 16k for a new car???


Good question....(_;)

I don't buy anything that I cannot afford to pay for.
banned#10
Dantooine
We're looking to purchase a new car. We need to borrow £16k


And this why the financial crisis continues. Do you REALLY need 16k for a new car???

+1

why not just buy a 8.5K car and not be saddled with 2 loans?
#11
Borrowing money is the best thing for the economy, presuming op cam afford it

Personally I would buy an 8k car though :)

Edited By: sancho1983 on Aug 09, 2010 10:51: edit
1 Like #12
i would never go down the loans route! if you don't have the money then you don't spend. simplez!
banned#13
sancho1983
Borrowing money is the best thing for the economy, presuming op cam afford it

Personally I would buy an 8k car though :)

Are you Gordon Brown in disguise? Debt is what got this country in the mess its in!
#14
csiman
Dantooine
We're looking to purchase a new car. We need to borrow £16k
And this why the financial crisis continues. Do you REALLY need 16k for a new car???
+1why not just buy a 8.5K car and not be saddled with 2 loans?

There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!
banned#15
dinglebin
csiman
Dantooine
We're looking to purchase a new car. We need to borrow £16k
And this why the financial crisis continues. Do you REALLY need 16k for a new car???
+1why not just buy a 8.5K car and not be saddled with 2 loans?


There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!


What are your requirements?
#16
csiman
sancho1983
Borrowing money is the best thing for the economy, presuming op cam afford it

Personally I would buy an 8k car though :)

Are you Gordon Brown in disguise? Debt is what got this country in the mess its in!


Keynesian Economics mate.
banned#17
strike
csiman
sancho1983
Borrowing money is the best thing for the economy, presuming op cam afford it

Personally I would buy an 8k car though :)

Are you Gordon Brown in disguise? Debt is what got this country in the mess its in!


Keynesian Economics mate.

call it what you will but it hasnt seemed to have worked for the decade (i.e generations of austerity to repay the debt).
#18
dinglebin


There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!


Why not save up and buy it then?

Instead of throwing money away in inflated interest.


There are thousands of people out there that thought that they could afford the repayments on the shiny new car that they do not own....alas they are in the mire now.
2 Likes #19
Why question the OP? They want a £16k car so why are people wanting to know anything more than that? It's their own business and they are looking for assistance with their options, not questioned on their needs.
#20
Inactive
dinglebin
There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!
Why not save up and buy it then?Instead of throwing money away in inflated interest.There are thousands of people out there that thought that they could afford the repayments on the shiny new car that they do not own....alas they are in the mire now.


Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.
banned#21
dinglebin
Inactive
dinglebin
There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!
Why not save up and buy it then?Instead of throwing money away in inflated interest.There are thousands of people out there that thought that they could afford the repayments on the shiny new car that they do not own....alas they are in the mire now.



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


So why do you want this much debt?

You might lose your job.
1 Like #22
Scouser78
Why question the OP? They want a £16k car so why are people wanting to know anything more than that? It's their own business and they are looking for assistance with their options, not questioned on their needs.

Well said :)
#23
dinglebin



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


Fair enough, it's your life.

Personally I never ever buy anything that I cannot afford to pay for. ( mortgage excluded, but paid off in full now )
#24
If both of the lower loans you have enquired about investigated your credit history without the existence of another £8000+ debt, they may have been happy to lend at a low rate on that basis.
So the first loan will be fine.
But if you have to declare the first loan when you get the second one (unless you do them simultaneously - not sure on the legality of that...:) ) the rate offered might be higher based on your increased commitments and therefore risk.
#25
DLM
dinglebin
Inactive
dinglebin
There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!
Why not save up and buy it then?Instead of throwing money away in inflated interest.There are thousands of people out there that thought that they could afford the repayments on the shiny new car that they do not own....alas they are in the mire now.


then

I'd just sell the car!!


Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


So why do you want this much debt?

You might lose your job.

DLM
dinglebin
Inactive
dinglebin
There is absolutely no difference between buying an 8k car or a 16k car as long as you can afford the repaymnets. 8k may suit your requirements and cicumstances like 16k suits mine!!
Why not save up and buy it then?Instead of throwing money away in inflated interest.There are thousands of people out there that thought that they could afford the repayments on the shiny new car that they do not own....alas they are in the mire now.



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


So why do you want this much debt?

You might lose your job.
#26
Inactive
dinglebin



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


Fair enough, it's your life.

Personally I never ever buy anything that I cannot afford to pay for. ( mortgage excluded, but paid off in full now )


the world needs a mixture of both cautious and risk taking spenders! Thanks for making up the cautious numbers!!!
banned#27
dinglebin
Inactive
dinglebin



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


Fair enough, it's your life.

Personally I never ever buy anything that I cannot afford to pay for. ( mortgage excluded, but paid off in full now )


the world needs a mixture of both cautious and risk taking spenders! Thanks for making up the cautious numbers!!!


Why anyone would put themselves in so much debt at a time when the job centres are full is beyond me.

Thank god I only have a small amount of debt, I can't wait to be debt free.
#28
Inactive
dinglebin



Because my friend - my circumstances 5 years ago were not as good as they are now and I was unable to save £300 per month. I now have £300 per month disposable income. I also require a new car now and not in 5 years time. Thanks so much for your concern tho.


Fair enough, it's your life.

Personally I never ever buy anything that I cannot afford to pay for. ( mortgage excluded, but paid off in full now )


Who the hell are you to comment like this? The person isn't asking if it is right, they are asking advice. Trouble is we can't all afford to buy £16K cars outright can we? Do you get paid in one lump sum? No, most of us get paid monthly, therefore it works out better to pay for things monthly sometimes. LIFE?=GET ONE.
banned#29
tinkerbell28
Scouser78
Why question the OP? They want a £16k car so why are people wanting to know anything more than that? It's their own business and they are looking for assistance with their options, not questioned on their needs.


Exactly how sanctamonius can some get. We have 2 cars one we bought outright and another which we had on car debt. Didn't want to save for 2 cars outright we wanted 2 now. Which we have now paid off but it's 4 years old so are trading it in to get another car probably double what you are about to spend.

We can afford the payments 10x over, so who gives a damn what other people buy? If everyone went through life with what if's you'd never buy a house, nothing, it's what insurance is for, so leave him alone

to be fair, I didnt see blatant criticism; more advice that people (OP included) should think about the reasons for their purchase a bit more and the possible future disadvantages should one fall on hard times. A 6 year car loan with no deposit saved even seems quite risky to me but each to their own so fair enough.
#30
aircanman

Who the hell are you to comment like this? The person isn't asking if it is right, they are asking advice. Trouble is we can't all afford to buy £16K cars outright can we? Do you get paid in one lump sum? No, most of us get paid monthly, therefore it works out better to pay for things monthly sometimes. LIFE?=GET ONE.


It is a forum where people are entitled to express an opinion ( within the rules )

If some people are happy to spend over £20.000 on a £16,000 car, that is fair enough, I would far sooner just pay the £16,000, that leaves £4,000 to spend on something else.
#31
Wrong on 2 accounts. I do have a sizeable deposit and it is a 5 yr loan. Plus after 5 years I will own a car that I can trade in meaning I will not need to borrow 16k next time as I will have an evan larger deposit. Cheers
banned#32
dinglebin
Wrong on 2 accounts. I do have a sizeable deposit and it is a 5 yr loan. Plus after 5 years I will own a car that I can trade in meaning I will not need to borrow 16k next time as I will have an evan larger deposit. Cheers


How much will the car be worth in 5 years?

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