Loans

[Mr Plod]

Hey guys. I'm after getting a car but don't have the money at the moment. I've thought about getting a loan and so did a quick search on MoneySupermarket.com... I'm only looking to spend about £1000 on a car and then insurance so I was thinking of getting a £1200 loan. When I searched it came up with some reasonable deals such as borrow £1200, pay £104 a month and end up paying £1250 back which I can live with. So what I was wondering was what I need to know about loans. Are they a good idea and how long does it take to apply? I can easily make the repayments. So yeah just general info on it all please... Maybe who I should look to go with and the like...

Thanks in advance

[trials_pimp]

as long as you have good credit and ID you could walk into your bank and get one in about 10 mins.

Make sure you pay by Direct debit, cos missing loan payments will f**k your credit.

Just dont be stupid, and make sure you can afford the repayments.

[Fish-Finger-er]

anybody know if you can make overpayments on a loan, for example. im looking at gettin a £3k loan next february, payable over 2 yearas, so like £150 a month covers it.

now if i was too say one month, afford £400(say i worked a couple of hours overtime, stayed in etc) could i pay £400 off the loan, and be done in say 22 months, due to that overpayment, or am i set to, £150 a month for 2 years.

[Mr Plod]

as long as you have good credit and ID you could walk into your bank and get one in about 10 mins.

Make sure you pay by Direct debit, cos missing loan payments will f**k your credit.

Just dont be stupid, and make sure you can afford the repayments.

Hey yeah. I've been told banks aren't the best place to go for loans as they tend to have super high interest rates...

I can easily afford the repayments. I wouldn't get myself into it if I didn't think I could handle it. Thanks for the info...

[Heatsink]

I got a 6k loan from my bank as soon as I left Uni. It seemed to be necessary since I'd landed a job straight away up North and wanted the peace of mind of a car which wasn't very old, plus some space cash to help me with my move, pay off the overdraft etc.

It sounds like you've already thought more about it than I did! I should have been working out how much I'd actually be paying back in the long run, thinking about how much per month would be manageable, and wondering about Payment protection and in what circumstances I may be having problems paying back the loan. They make it easy for you to sign up, but you could feel the pinch for a long time afterwards if you over stretch.

I went along to the bank with little prior knowledge and when put on the spot about paying additional payment protection, I decided it would be the responsible thing to do. It was a major decision which meant me giving them more money. I was perfectly entitled to say, "Hmm, that's interesting. Can you write down some figures for me to take away and I'll get back to you at a later date" Later on into paying off the loan I learnt that you don't want to be signing up for that unless you've had a few days to read all the small print and have a think about whether it's likely to be any use. It was such a tricky decision because with the theme being me going off to start my own life, it seemed so right to close the door on any one having to bail me out if I had any problems. Of course circumstances did arise where it would have been useful to use the payment protection, and of course I realised that it wouldn't cover these, or any other things that were likely to happen. Very clever of them! Kerching.

It's all a good learning curve though, which I think has stood me in good stead now. I never borrow money and don't have any credit cards or store cards. I do have a mortgage though, but somethings are avoidable I guess!

Here are some things I learnt.

• Look at some numbers before hand, even inaccurate calculations are better than turning up at the bank and signing up without trying to think ahead.
• Be very sceptical of paying for payment protection. If the loan repayment is looking like it would all fall apart if certain things happened in your life, don't take the loan out maybe.
• Don't do the deal in one meeting. Have a cooling off period after your first meeting to read the small print and let the numbers sink in.
• If you need to borrow, borrow as little as possible.
• Write down all the important questions before your first meeting, turn up with a notebook and make sure that you're able to note down a clear answer that makes sense later. Make sure you ask them to repeat the answer again if their response wasn't clear. Over time (should you decide the loan is for you) you'll be paying them quite a tidy sum for having the money loan straight away. It's their job to explain everything clearly upfront. The question about doing overpayment is a very good one!
• Never borrow money from family because it'll ruin your relationships.
• Be wary of them buttering you up like I recall they did for me. They may be very positive, complimentary and encouraging about your future, all part of egging you into something which may not be right for you. Again, don't rush into a decision and call the meeting to an end when you've got all the info rather than letting yourselve be carried away by their talk.
• Vorderman and Tufnell aren't to be trusted.

Steve

[Mr Plod]

I got a 6k loan from my bank as soon as I left Uni. It seemed to be necessary since I'd landed a job straight away up North and wanted the peace of mind of a car which wasn't very old, plus some space cash to help me with my move, pay off the overdraft etc.

It sounds like you've already thought more about it than I did! I should have been working out how much I'd actually be paying back in the long run, thinking about how much per month would be manageable, and wondering about Payment protection and in what circumstances I may be having problems paying back the loan. They make it easy for you to sign up, but you could feel the pinch for a long time afterwards if you over stretch.

I went along to the bank with little prior knowledge and when put on the spot about paying additional payment protection, I decided it would be the responsible thing to do. It was a major decision which meant me giving them more money. I was perfectly entitled to say, "Hmm, that's interesting. Can you write down some figures for me to take away and I'll get back to you at a later date" Later on into paying off the loan I learnt that you don't want to be signing up for that unless you've had a few days to read all the small print and have a think about whether it's likely to be any use. It was such a tricky decision because with the theme being me going off to start my own life, it seemed so right to close the door on any one having to bail me out if I had any problems. Of course circumstances did arise where it would have been useful to use the payment protection, and of course I realised that it wouldn't cover these, or any other things that were likely to happen. Very clever of them! Kerching.

It's all a good learning curve though, which I think has stood me in good stead now. I never borrow money and don't have any credit cards or store cards. I do have a mortgage though, but somethings are avoidable I guess!

Here are some things I learnt.

• Look at some numbers before hand, even inaccurate calculations are better than turning up at the bank and signing up without trying to think ahead.
• Be very sceptical of paying for payment protection. If the loan repayment is looking like it would all fall apart if certain things happened in your life, don't take the loan out maybe.
• Don't do the deal in one meeting. Have a cooling off period after your first meeting to read the small print and let the numbers sink in.
• If you need to borrow, borrow as little as possible.
• Write down all the important questions before your first meeting, turn up with a notebook and make sure that you're able to note down a clear answer that makes sense later. Make sure you ask them to repeat the answer again if their response wasn't clear. Over time (should you decide the loan is for you) you'll be paying them quite a tidy sum for having the money loan straight away. It's their job to explain everything clearly upfront. The question about doing overpayment is a very good one!
• Never borrow money from family because it'll ruin your relationships.
• Be wary of them buttering you up like I recall they did for me. They may be very positive, complimentary and encouraging about your future, all part of egging you into something which may not be right for you. Again, don't rush into a decision and call the meeting to an end when you've got all the info rather than letting yourselve be carried away by their talk.
• Vorderman and Tufnell aren't to be trusted.

Steve

Cheers Steve. That was all very encouraging and was just what I was after. I'm looking to take out the loan in the next couple of weeks. Only looking to keep it simple (Sub £1500). I'm not going to commit to it if I can't keep up with the repayments. Ideally I'm looking to spend no more than £1000 on a car and then the extra cash left over would be for the deposit for insurance. I'm still just looking about at the moment and it's just an idea in my head. Will probably pop along to my local Abbey (As thats who my account is with) and will sit down and talk with someone there.

I had a look again on Money Supermarket and Abbey seemed to have a good rate on the website so I'm hoping if its the same when I go see them tomorrow then I will more than likely consider using them for the loan instead of a random company. Thanks for your help. Much appreciated

As for that Vorderman and Tuffers statement...

Cheers

[br3n]

anybody know if you can make overpayments on a loan, for example. im looking at gettin a £3k loan next february, payable over 2 yearas, so like £150 a month covers it.

now if i was too say one month, afford £400(say i worked a couple of hours overtime, stayed in etc) could i pay £400 off the loan, and be done in say 22 months, due to that overpayment, or am i set to, £150 a month for 2 years.

You can't pay more/less each month than you've stated when you signed all the contracts etc, Also, If you wish to complete early (pay it all off early) you have to pay the final balance in full and usually 2 months extra interest on top.

--

edit, for that amount of money (ie, not actually much) would you not be better off borrowing it on credit card? they're likely to only want about £40 minimum payment per month so if all goes tits up you dont have to find much to pay back, But... unlike a loan you can pay off the odd £200/£300 whenever you like. You can get some very good rates for cards in the first 6 months.. might be worth a shot?

I borrowed £3k for my car, Its not a nice feeling to have over your head, Sold the car in the end - made a nice proffit and paid the loan off with enough left to buy some toys!

Edited May 17, 2007 by trialsmad

[Fish-Finger-er]

You can't pay more/less each month than you've stated when you signed all the contracts etc, Also, If you wish to complete early (pay it all off early) you have to pay the final balance in full and usually 2 months extra interest on top.

--

edit, for that amount of money (ie, not actually much) would you not be better off borrowing it on credit card? they're likely to only want about £40 minimum payment per month so if all goes tits up you dont have to find much to pay back, But... unlike a loan you can pay off the odd £200/£300 whenever you like. You can get some very good rates for cards in the first 6 months.. might be worth a shot?

I borrowed £3k for my car, Its not a nice feeling to have over your head, Sold the car in the end - made a nice proffit and paid the loan off with enough left to buy some toys!

yea was debating seeing if i could get another credit card with say a £4k limit, and feck this one off, and do it that way, just dont think id ever end up paying more than the minimum back though, other then odd occassions, whereas if i had an agreement saying pay back £200 per month, and allow overpayments of £200 a month, mortgage styleee.