Last minute panic about bank loan

[FoofooLeSnoo]

Dh and I are on the verge of taking out a loan for around 10 grand for home improvements and another second hand car. We have an excellent credit score and should get the best rates around 3.6%. We are looking at around 5 years term. I will need to get regular agency work to cover the payments. If all goes to plan, one shift a week will cover the extra money needed plus a bit more. However I am worried about what would happen if I can't get any extra work as there are no guarantees. Would I be completely mad to consider this loan? Should I wait until I have regular contracted hours, but that might not happen for years in my current job!

Yes, I'd say so. It sounds like you can't afford it, unless you're guaranteed this extra work, which you're not.

How do you know you "should" get the best loan rates? Your credit "score" is meaningless. Lenders will look at a number of factors when deciding what %APR to offer you. They only need to offer the advertised rate to 51% applicants, so I wouldn't rely on it.

I'm guessing you don't "need" these home improvements or another 2nd hand car (can you afford the upkeep and maintenance?). So maybe wait until your financial situation improves before considering a loan. It doesn't sound like you have much wiggle room at he moment.

I'm just not sure. 2 shifts would easily cover it, and I'm likely to get that as long as I'm not too fussy about where I work. But we won't have much wriggle room, you're right there I guess. According to the money saving expert site we would be very likely to get best rate but I guess we'll have apply to know for sure!
The second car and home improvements are fairly urgent too as we are struggling to manage with the one car now especially if I'm working more as I'll always have the car.I just feel like we'll never be able to afford it without a loan at some point, whether that's now or in a few years. We're pretty sensible with money, no credit cards or other loans apart from mortgage yet so that's why it makes me nervous I think!

you don't have to spend loads on cars the last 5 cars I've had have been sub £500. each and the only reason I get rid of them in the end is because I get bored of them. The last one a honda civic cost £500 had for 2 years cost nothing to get through the MOT done 36,000 miles and only opened the bonnet to put screen was in it. so no service costs either. just got rid of it for £250 because the clutch is getting a bit tired and I fancied a change now got an MR2 which cost me Yep you guessed it £500.

so instead of getting the loan just save up for a month or 2 and buy yourself a banner.

as for home improvements can't you DIY and spread the costs by doing bits as you can afford them?

I wouldn't ever get a bank loan for a car tbh.

If you desperately need a car, and a cheap one, NOW is the best time to buy.

The price of scrap metal is through the floor - a few years ago, old (but working) cars were often worth much more as scrap, with scrappies paying £400/£500 for your typical KA sized car. People were scrapping their 12 year old cars rather than selling them for the same price just because it was easier and not because the car was beyond use.

Now, you can pick up a decent enough car for a few hundred as more people are selling them because they're worth nothing as scrap. Look on Auto Trader, there are a load of semi decent cars for under £500 which have still got a few years of life in them.

I just feel like we'll never be able to afford it without a loan at some point

If you can afford the loan repayments then you can afford it, you'll just have to wait longer until you've saved the equivalent of the repayments - but this will be quicker than paying off the loan because you'd not have spent on any interest.

Why not pick up a couple of extra shifts for say 6 months first and just bank the money? That way, at least you know if you don't get to work one week you won't be panicking about the loan as you'll have some savings to cover it?