False Loan Rate advertising? Advertised at 7.9 offered 14.1, excellent credit score!

money-clown

False Loan Rate advertising? Advertised at 7.9 offered 14.1, excellent credit score!

I am not in a position to investigate this but I am baffled, really baffled! So I thought I would post my experience in the hope that others are experiencing the same problem and someone may have the power to investigate further.

I just applied for a load with theaa, at there advertised rate of 7.7/7.9%, the amount was 17,000.00. They completed the unsecured load application and said congratulations we are able to offer you a loan at 14.1%! Not the advertised 7.7/7.9%

Confused I asked why, they said "because of my credit report", off I when to the experian where I obtained my credit report and scoring... of Excellent - "Your score is above average – 71% of people have a score lower than Excellent"

I got the impression there was a sales incentive going on at theaa, can anyone else comment?

CLAPTON

it could be many things

how much do you earn?
do you have any other debt?
17,000 is quite a lot to borrow

money-clown

I have a good income of 39k, and debt is 17,000.00 spread about hense the consolidation.

_Andy_

Each lender has different scoring methods, it's not just about what your Equifax/Experian so-called score says.
You may just not meet their profile, or it could be various things, as Clapton says above.
Lending criteria for large loans has tightened up in the last 12-18 months.

money-clown

So they advertise loans at 7.7/7.9% on borrowing 7,000+ and that is acceptable to offer 14.1 (double)? I presume then that if I did not have an excellent credit rating it would have been rejected?

CLAPTON

They may take the view that as your existing debt is 17k that you will then have 34k debt in total and feel that is a higher risk and hence the higher APR.

Rafter

money-clown,

Clapton is right - because they have no guarantee you will use the money to consolidate or not run up debt on credit cards or other loans again you haven't qualified for the typical rate. It may just be that nobody who asks for more than £15k gets the typical rate too! It all depends on the scorecard the bank are using.

The AA have to offer the typical rate to 67% of customers in order not to break advertising rules. Generally loan companies want customers to buy the rip off PPI insurance, so they will offer the typical rate to those customers who tick the box for loan protection first.

They will then balance their acceptance rate for other customers so that 67% in total get offered the typical rate. The other 33% can be offered whatever rate they feel like - as you have discovered.

Suggest you break it down.

Apply for £10,000 somewhere else. Offer to take PPI then cancel it before the cooling off period is up. Once you have paid off some of your debt with that, wait 3 months and see if you can get the other £7,000 elswhere.

Good luck.

R.