Loan at 10% - yes or no?!

Bexter

Hello

Without going into a load of unnecessary info (hopefully!), in June 2003 I signed a Scottish Trust Deed which became protected. I paid it off but had to extend payments for a few months at the end which the trustee approved. I was discharged in March 2008 and made sure I got my credit file sorted out - ie all previous debts marked as settled and the default date no later than June 2003. This of course means that in June this year they will all drop off my credit file. Obviously up till now I have a)not wanted much credit and b)haven't been able to get it anyway.

But I have got my finances back in decent shape, I earn over £40k a year and have built up 18 months of completely clean credit history by limited use of 2 credit cards, a mail order account - and a mobile.

So all is good - and I am 6 months pregnant which my partner and I are over the moon about. However, it does mean 6 months without pay (well, other than Govt statutory) and of course we have no savings - and outgoings that need to be covered. He has a credit card debts of about £2k (on 30%+ interest rates - he got these to build his credit after a bad spell - his credit is now clean but we have just moved house, he's had a couple of searches recently so we are laying off applications for a bit), plus I owe £2k to a friend who helped me out last year and needs paying back now.

So we have worked out our budget for the remainder of the year and the fact is we need to pay the above off - and we will be about £5k short of covering our expenses. (And yes, we've cut back as far as we can and will do more of it - trying to sell a car which would help too) So we talked about it and rather than lying awake at night worrying about how we'd manage, I decided to apply for a loan. I guess 1) I didn't really expect to get it since all my defaults are still listed on my CR file and 2) I've got no other searches in the last 6 months so wasn't going to do a lot of harm.

Anyway don't get me wrong, I don't relish borrowing money again but the fact is we need to one way or another, I'm sure we won't get 0% credit cards in current climate and with our history so - anyway - I applied to Tesco loans and was told this morning that the application has been accepted - at a rate of 10%.

My feeling is that with my history this is a good rate. I know I could wait till June when the defaults are gone - BUT my application won't be helped by the fact that we moved in January, and I'm about to change banks to a much better account - plus of course I will be about to start maternity then which isn't ideal for application purposes I would think - or my stress levels!

I guess I just wanted anyone's opinion on whether 10% is a decent rate with my history and with the way things are just now - I know better ones are available but am so used to being a sub-prime person it seems good to me and is certainly affordable - we'll cover it with the payments we make to the other debts we'll clear. So do I take it?!

ComplyOrDie

Only you can make the decision about a loan, you know all the facotrs, if you think there is too much risk don't go for it as it could ruin your credit forever.

Bexter

I know djcoppula, I think it's a bit too good to be true too, maybe that's why I'm looking for reassurance..

But yes, it seems it's definitely approved - I sent back the signed forms last weekend that quoted 10% and gave the monthly payments - along with a bank statement as requested - and they have today confirmed approval of the loan. They credit checked initially with Equifax.