Car loan before or after drawdown

skinny90

Hi all

I’m mortgage approved and i plan on drawing down in about a month or so…

i also am due a car upgrade and have seen an ideal car with an ok price. Budget is around 25-30k

I’ve just cleared the last car loan and I need to upgrade to a bigger car.

in terms of affordability it’s going to cost me an extra 300 per month which is absolutely fine.

im just worried will it affect my drawdown or will my ability to borrow after drawdown be affected ?

any advice would be appreciated

Oscar_Madison

Is your proposed loan with your mortgage provider? If so they’ll simply make a credit decision based on all the information you provide- so you’ll know pretty quickly if approved or not- as long as you include the mortgage or proposed mortgage payments they’ll either say yes or no. So apply online if that feature is available and see the decision.

Are you happy you could continue to service the loan and the mortgage if interest rates continue to rise? Your bank will stress test the loan from this perspective so if money looks tight after that stress test they may refuse.

if going elsewhere for the loan Before drawdown mortgage lenders tend to check updated financial details- so to avoid any unnecessary issues I would still tell my mortgage lender about my new car loan but do it in advance if car loan drawdown and see what they say - it MAY affect things.

Fibally for the car loan consider what’s the cheapest finance- is it your bank, or would credit union rates be better? If you’re buying second hand, have you considered a new car and a finance deal which might work out cheaper long term?

Just a few things to consider

Oscar_Madison

Also Sorry- how much is the car loan? You’ll be paying back a lot more than 300 per month if it’s 25-30k or is that the price of the car, but not the loan?

zg3409

As said around time of drawdown they will ask for latest bank statement, latest credit card statement etc. Beware interest rates are going up so your mortgage repayments may increase quickly.

Beware taking on more debt commitments in case your circumstances change and not having the cash to buy a car is not a good start.

If buying a house you will have lots of new house expenses such as appliances and accessories that could easily add up.

You need to look at total cost of ownership of car as cars are typically very bad investments and reducing your loss while having a reliable car should be the aim.

skinny90

Thanks all for the replies

so old loan was 210 per month

it’s cleared and if I was to get a car rates vary but between 470-550 would be my replayments..

rates wise i see an post or Revolut as the cheapest form.

I don’t see much value from finance on new cars but il certainly check them out

it’s good to know either way

with regards rising rates, yes rates have risen 3 times since our initial application. Expensive but still affordable (below what our current rent is)