Personal Loan for a new car

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benevs
benevs Posts: 47 Forumite
in Loans
Hi all

After some advice please.

I'm looking to buy a new car and I wanted to take out a new personal loan from my bank at 3.5% for £10k over 5 years.

So I applied online expecting to get the 3.5% APR only for a few days later when the documents came though to only been approved at 9.9%. Triple the amount!

I'm 28 and I earn a good salary (27k). And I still live with my parents so i don't really have any outgoing bills apart from my bike, phone and a little bit of rent. My current bills are probably only a quarter of my salary. Also my current car loan is on there as well. With the new car loan expected to take its place, just costing a few quid more. I also checked my credit score and its at 997 out of 999. I've never missed a payment on anything.

So I phoned the bank to find out why and all I got was that they couldn't tell me why I only got approved at 9,9%. The only reason I can think of is because of my age and I don't own a house?

As I said as far as i'm concerned my credit rating has nothing wrong with it and I really can't think of a reason why I wouldn't get the 3.5% APR

So my question is is there any point in applying to anybody else if my own bank will only give me 9.9%? Can I appeal against it or something or put a complaint in or is it worth me threatening to move my current and savings account to another bank in hope they will then give me a better rate?

Thanks

Ben
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  • bengalknights
    bengalknights Posts: 5,021 Forumite
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    Personally i would advise against a loan for the car and instead maybe looks towards dealers 0% deals (if your up for PCP deals)
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    I'd guess the existing loan and perhaps limited credit history are the issue. It's nice of Experian to give you a high score but unfortunately they don't give loans.

    You could try elsewhere but you may be limited in options.

    Only threaten to move your accounts if you want to move your accounts and still not have a loan.
  • Faith177
    Faith177 Posts: 2,927 Forumite
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    benevs wrote: »
    Hi all

    After some advice please.

    I'm looking to buy a new car and I wanted to take out a new personal loan from my bank at 3.5% for £10k over 5 years.

    So I applied online expecting to get the 3.5% APR only for a few days later when the documents came though to only been approved at 9.9%. Triple the amount!

    I'm 28 and I earn a good salary (27k). And I still live with my parents so i don't really have any outgoing bills apart from my bike, phone and a little bit of rent. My current bills are probably only a quarter of my salary. Also my current car loan is on there as well. With the new car loan expected to take its place, just costing a few quid more. I also checked my credit score and its at 997 out of 999. I've never missed a payment on anything.

    So I phoned the bank to find out why and all I got was that they couldn't tell me why I only got approved at 9,9%. The only reason I can think of is because of my age and I don't own a house?

    As I said as far as i'm concerned my credit rating has nothing wrong with it and I really can't think of a reason why I wouldn't get the 3.5% APR

    So my question is is there any point in applying to anybody else if my own bank will only give me 9.9%? Can I appeal against it or something or put a complaint in or is it worth me threatening to move my current and savings account to another bank in hope they will then give me a better rate?

    Thanks

    Ben

    The bank will have their own internal requirements for someone to be eligible for a 3.5% loan. Only a certain percentage of customers will get the 3.5% the rest will get whatever the bank decided and it is as simple as that as they are lending the money that can impose what terms they want

    You're only choice is to accept it or say no thanks you can't make them give you a lower rate if you're not eligible for it
    First Date 08/11/2008, Moved In Together 01/06/2009, Engaged 01/01/10, Wedding Day 27/04/2013, Baby Moshie due 29/06/2019 :T
  • benevs
    benevs Posts: 47 Forumite
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    Thanks both,

    The only problem with 0% finance deals is that it tends to only be main dealers, which means I'll be paying more for the car anyway.

    I've had plenty of credit in the past for other cars loans, phones and a personal loan before. I also have a credit card but with nothing on it at the moment, but as I said I've never missed a payment on anything. So I don't think its limited credit history.

    I think I'm just annoyed that I didn't get the lowest APR even though there is nothing wrong with my credit and it makes me think that very few people will get loans at the APR
  • benevs
    benevs Posts: 47 Forumite
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    Thanks, i guess I'd like to know what these requirements are exactly because I can't see how I don't tick all the boxes, or so to speak
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    They won't tell you their precise criteria as it can encourage applicants to...enhance their application details.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    51% or more of successful applicants will get the headline rate.
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    benevs wrote: »
    Thanks, i guess I'd like to know what these requirements are exactly because I can't see how I don't tick all the boxes, or so to speak

    You wont find out what the lenders criteria is, if it was known then everyone else would go to great lengths to make themselves appear suitable applicants meaning the lender wouldnt make much money.

    To be honest 9.9% isnt bad.

    Your confident you can meet the monthly paymemts so where have you put the money you would use for the monthly payments ?
  • Gaz83
    Gaz83 Posts: 4,047 Forumite
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    benevs wrote: »
    Thanks, i guess I'd like to know what these requirements are exactly because I can't see how I don't tick all the boxes, or so to speak
    Won't happen.

    If banks published information along the lines of "to get the headline rate you must have a credit profile of x, y and z", then all that would happen is everyone who applied would suddenly have a credit profile of x, y and z.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • Jamiesmum
    Jamiesmum Posts: 368 Forumite
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    27k salary, you only use 25% of it on bills, wouldn't it be much better to avoid any interest save 2/3 months wages and trade your current car in?

    Then you'll own it outright, no interest and no loans.

    Personal preference of course, but seems like the better option. What car you looking at?
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