Car loan advice?

Elessar

I'm looking to get a loan for a new/nearly new car in the next 6-9 months but through my research on credit providers I'm not sure where to go for the best deal. I'd appreciate some advice!

After a trade in and haggling, my best guess is that (for the car I want) I'd be paying anywhere from 22-25k cash.

In order to keep my borrowing costs down (and loan repayment term as short as possible!) I'd want to get a loan for about 17k of that, over 3 years, and use savings to make up the rest.

A loan for me has to be flexible so as to allow me to pay extra amounts as often as possible and pay off the loan early, with no penalties.

I have looked at the credit union and was all ready to go down today to open an account but I since discovered that the savings I will be putting into it would be used as collateral and I wouldnt be able to touch it - rendering the CU useless to me (I need savings+loan).

I've looked at the banks, and AIB and NIB seem the cheapest. I have my current account with NIB for about 10 years but the variable rate is a bit dearer and I don't know if this allows for extra payments and an early pay-off?

Aib look good too, cheaper slightly, but I only have a credit card with them not a current account. Would they even consider me for a loan?

I've never had a variable rate loan before - how often do the rates change? Are they large changes? Am I taking a massive gamble?

Help appreciated!

dellas1979

Well I got a loan from the CU last year and had e50 in my account!

I had to show them my savings from my other bank account and a few payslips.

I wanted to use savings (that I saved in my other bank account) plus the CU loan to pay for the car.

So, what you need to do is keep your savings where they are, make the loan application and then consolidated it all when you are drawing down on the loan.

I made the mistake of thinking I could throw my savings for the car into the CU account and then put it all together with the loan. The CU lady kindly told me that if I did that, then it would be used as collateral on the loan.

Elessar

dellas1979 wrote: »

Well I got a loan from the CU last year and had e50 in my account!

I had to show them my savings from my other bank account and a few payslips.

I wanted to use savings (that I saved in my other bank account) plus the CU loan to pay for the car.

So, what you need to do is keep your savings where they are, make the loan application and then consolidated it all when you are drawing down on the loan.

I made the mistake of thinking I could throw my savings for the car into the CU account and then put it all together with the loan. The CU lady kindly told me that if I did that, then it would be used as collateral on the loan.

So you got a large loan from the CU with only €50 in your CU savings account?

I thought you needed a third of what you want to borrow in your CU account?

missrandomer

im in same position as you Elesser, but im told not to buy anything at the moment and hold to car i have...

Would love a new car though. But i would imagine aib would consider you. make an appointment with them and see but all banks are looking to bring in more money so they are slowly approving loans etc from what i hear.
hope it helps;)

spcw

Borrow full car cost from CU they are doing 7% deals. Pay down loan to savings amount and clear off the loan. Still better value than the bank and you get divident /interest on the savings amt.

wiger toods

Hang on, im sorry but im a bit slow. I just opened an account with the cu in the hope of saving e10000 give or take over the next two years, so i can start a business. My plan was to save that money, then get a loan, and so between my savings and a loan, that was to be my start up capital. So if i save that money, will i have to leave my savings in the cu? :eek:

spcw

The CU require between 10-25% (depending on your profile with them) in savings so if you save 10K you will be able to access a loan of up to €40K with the 10K held on deposit as security.

wiger toods

spcw wrote: »

The CU require between 10-25% (depending on your profile with them) in savings so if you save 10K you will be able to access a loan of up to €40K with the 10K held on deposit as security.

E40000 is the figure i will probably need actually. So i save the E10000, hopefully get the loan for E40000, forget the E10000 savings, and just start repayments on the E40000 loan? Sorry Elessar for hijacking your thread by the way

Rebel1977

Variable rates change whenever banks change their rates, could be once in the year, or never you cant predict it. Beauty with a variable loan is you can make out of course payments, and close it early without incurring any extra charges like you do with a fixed rate.

dellas1979

Well, this might astonish you altogether then...when I went in to make the initial loan application, the lady went to check my account and there was about e8 in it.

She told me I had to have a minimum balance of at least e50. Luckily I was going out that night and had e50 in me wallet.

Id say they thought I was crackers.

I then negotiated the terms of the loan with them (she wanted me to pay over 2 or 3 years - I was thinking more 4-5 years to spread out the cost - of course the option is always there to pay it back earlier with no penalty). I got this, but on top of my repayment each week, they take e5 off me for savings. That keeps them happy.

My point being, if you dont ask or try, you wont get. Be aloof and ask all the questions in the world. The credit union gang are usually very very nice.