Loan Acceptance Vs Credit Score

PaulDog2017 · 9 August 2017 at 10:14AM

Hi All,

Needing a bit of advice. My wife and I needed a loan to consolidate debt and extra for some large home improvements. Felt it would be sensible to bring this to one monthly repayment. We searched online for the best loan's around at the minute and applied for one online at 2.8% APR. We heard back from them yesterday saying they had accepted the application but at 8%, not at the 2.8 we had applied at!

I have a good Credit Score at the moment and felt that the APR was considerably high. My fear is, if i decline this loan offer, this is going to look bad on my CS, and what is the chance of the next 'best' loan provider giving me the same rate, if not worse? Don't want to continue doing this and wreck my credit score.

Feel like its a bit of a gamble.

Hoping someone can point us in the right direction.

Thanks in Advance

Ebe_Scrooge · 9 August 2017 at 10:36AM

Your credit score is totally meaningless, and is not seen by lenders. Your credit history is what matters.

Firstly, the "headline" APR is only offered to applicants with a credit history that matches the lender's requirements perfectly. There can be many reasons why you're not classed as "perfect" - but an obvious red flag is the word "consolidation". Consolidation loans are rarely a good idea, and lenders tend not to like them - they don't know for sure that you actually will spend the money they lend you to pay off your existing debts.

You could try 1 more application to see how you get on - that won't have too much of a negative effect. But more than a couple of applications in a short space of time starts to look bad.

But I'll reiterate - consider carefully whether a consolidation loan is really a wise choice.

PaulDog2017 · 9 August 2017 at 10:51AM

So should we carry out another application to a different lender at the moment to try get a better interest rate? Although the 8% loan is available for us to accept at present?

Also in this application we will put that it is for home improvement as the majority of the borrowed money will infect be used for this anyway, we have probably been too honest.

Thanks

MABLE · 9 August 2017 at 10:53AM

PaulDog2017 wrote: »

Hi All,

Needing a bit of advice. My wife and I needed a loan to consolidate debt and extra for some large home improvements. Felt it would be sensible to bring this to one monthly repayment. We searched online for the best loan's around at the minute and applied for one online at 2.8% APR. We heard back from them yesterday saying they had accepted the application but at 8%, not at the 2.8 we had applied at!

I have a good Credit Score at the moment and felt that the APR was considerably high. My fear is, if i decline this loan offer, this is going to look bad on my CS, and what is the chance of the next 'best' loan provider giving me the same rate, if not worse? Don't want to continue doing this and wreck my credit score.

Feel like its a bit of a gamble.

Hoping someone can point us in the right direction.

Thanks in Advance

As you know its all risk based and as you are incorporating other debts hence the reason the apr is higher.

Ebe_Scrooge · 9 August 2017 at 10:54AM

Another point occurs to me. Are the home improvements essential ? If not, you'd be much better paying off your existing debt first, then saving up for the improvements - it'll work out a whole heap cheaper in the long run.

MallyGirl · 9 August 2017 at 11:49AM

PaulDog2017 wrote: »

So should we carry out another application to a different lender at the moment to try get a better interest rate? Although the 8% loan is available for us to accept at present?

Also in this application we will put that it is for home improvement as the majority of the borrowed money will infect be used for this anyway, we have probably been too honest.

Thanks

In which case it will probably be down to affordability. You are looking to take on a significant amount of additional debt if it is mostly not being used to 'pay off' current debt.

I suggest doing a full SOA listing outgoings and the APRs of the current debt.
Can the home improvement not be done in chunks, saving up in between?

DCFC79 · 10 August 2017 at 8:38AM

PaulDog2017 wrote: »

Hi All,

Needing a bit of advice. My wife and I needed a loan to consolidate debt and extra for some large home improvements. Felt it would be sensible to bring this to one monthly repayment. We searched online for the best loan's around at the minute and applied for one online at 2.8% APR. We heard back from them yesterday saying they had accepted the application but at 8%, not at the 2.8 we had applied at!

I have a good Credit Score at the moment and felt that the APR was considerably high. My fear is, if i decline this loan offer, this is going to look bad on my CS, and what is the chance of the next 'best' loan provider giving me the same rate, if not worse? Don't want to continue doing this and wreck my credit score.

Feel like its a bit of a gamble.

Hoping someone can point us in the right direction.

Thanks in Advance

Your credit score is only seen by you and you only, it could be all singing and all dancing with bells and whistles but it still wont change the fact only you can see the score.

Lenders see the credit history, lenders cant tell from the score if you have debts, have missed credit payments.

If you decline the loan at 8% it wont look bad on you, all thats noted is a search was carried out.

The 8% might be the best you can get.

What is the debt ? What does it consist of ?

Loan Acceptance Vs Credit Score

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