Extemely high APR rate

mik10

Hi,

I currently have a loan with Lloyds, the APR on this loan is 11.9%. I want to try and reduce this rate by taking out a new loan. When I checked online, Lloyds the bank I have my current loan with (on which I have never missed a payment), all they could offer me was a loan @ 24.9%!

i have been overdrawn on my current account a couple of times recently.

However, why is it that a bank, whom I have sucessfully been paying back my original loan for 15 months, can only offer me what i regard as an extorsionate rate.

Any ideas please?

Tks

mik

_Andy_

When you say 'when I checked online' do you mean you went through a new loan application

mik10

Hi,

No I didnt actually apply. I went to see how much the APR would be. Like the preview bit when you are working out how much you want to borrow and over what period.

Phantom_Flan_Flinger

Until you go through the whole application process and they do a full credit check, there's no real way of knowing what interest rate you'll be offered.

Considering they're offering 9.9% typical, your 11.9% isn't bad.
You then have to factor in early repayment penalties on you current loan.

jonesMUFCforever

You don't mention how much you want to borrow or for how long so it is impossible to answer OP's question.

asandwhen

Phantom_Flan_Flinger wrote: »

Until you go through the whole application process and they do a full credit check, there's no real way of knowing what interest rate you'll be offered.

Considering they're offering 9.9% typical, your 11.9% isn't bad.
You then have to factor in early repayment penalties on you current loan.

This isnt correct if you are a Lloyds customer with internet banking. You can get a quote online based on your credit rating with lloyds without having to go through a credit check.

markelock

do they not write to you offering new loans?

I have one, my wife has one with Black horse. every month we get a letter each, offering us more and more (worked on the loan going down each month).

however the interest rate in the letters is 7.9, rather then online, where the loan rates are higher.

might be worth giving them a ring, they are freephone numbers (which at the moment I don't have to hand)

kevin_M

same for me i have a lloyds tsb account. with a current loan i went online to redo my loan and got offered a high 24.9%. i have never went over my overdraft limit and i owe nearly nothing on my lloyds mastercard.

even went into the branch and asked same apr. i think banks are using the credit crunch to make a few extra quid.

needless to say i aint taking the higher apr loan. i was just looking for lower payments i normaly overpay my loan now and again anyway i just wanted a little more avail cash for over the crimbo.

going to apply to a&l thu quidco. if my bank aint gonna offer what i want someone else will

Extant

mik10 wrote: »

Hi,

I currently have a loan with Lloyds, the APR on this loan is 11.9%. I want to try and reduce this rate by taking out a new loan. When I checked online, Lloyds the bank I have my current loan with (on which I have never missed a payment), all they could offer me was a loan @ 24.9%!

i have been overdrawn on my current account a couple of times recently.

However, why is it that a bank, whom I have sucessfully been paying back my original loan for 15 months, can only offer me what i regard as an extorsionate rate.

Any ideas please?

Tks

mik

Key part highlighted. You have just shown yourself to be a higher risk of default, since you have been overdrawn on your account. In the current climate this matters more now than it may have six months to a year ago.

Think of it from a personal point of view. For example: say you have Friend A, who lent Friend B £10 recently. B did not repay A, but is now asking you for a loan. Would you not be a little cautious?

flyballdog

Try this site - www.zopa.net

They offer loans too and you get an instant quote. I think they have members of the public loan them money which they then loan to you. Seems a lot easier than messing about with a load of questions from your bank to me....!

iolanthe07

i have been overdrawn on my current account a couple of times recently.

Says it all.