Personal Loans: how easy is it to get accepted

System

Applied to Alliance & Leicester on-line, initially they offered 9.7% for 10k over 48mths (typical was 5.9%) After speaking with them and insistig that they stop telling me how benifical it would be to take out their Loan Protection, I managed to get it down to 7.9%, having told them that I have a previous loan with them.

Not entirely satisfied, I tried Lombard Direct, they quoted 22.7% & weren't interested in discussing the reasons why it was so high. Eventually tried RBOS, got and instant decision at 6.4%.

Ironically they all use the same Credit referance Agency, but clearly have different policy rule with Lombard obviously going for maximum comic impact...

System

Applied for £7,000 with 36-month repayment to finance new car. Cahoot advertised 5.9% flexible rate, but was "offered" 10.8%. As my annual salary is in excess of 65k with no outstanding debts (other than mortgage) I wonder what it takes to qualify for the advertised rate.

MattieT

The whole thing is bizarre.

Having been a credit card tart for some years I stopped that last year and decided to cut right back to only two credit cards (one with 0% for some outstanding debt and one with cashback for monthly spending). I have a student loan (almost gone thankfully!) a professional studies loan with barclays (another three years on that one) and a graduate loan with RBS.

I cut back for a year and wanted to sort out the loans by getting better rates and/or transferring to credit cards on 0%. Try as I might I can't seem to get a decent rate for loans and even get turned down for some credit cards.

£65k per annum, home owner etc etc.

Who on earth gets the advertised rates???

gsrubin

Applied for £7,000 with 36-month repayment to finance new car. Cahoot advertised 5.9% flexible rate, but was "offered" 10.8%. As my annual salary is in excess of 65k with no outstanding debts (other than mortgage) I wonder what it takes to qualify for the advertised rate.

As a followup to this message (I was original post):

Have since heard from Northern Rock and Morgan Stanley. Both agreed to loans at the advertised rates of 6% and 6.5%, respectively.

morgand

Aplied to Cahoot for £20000 at the 5.8% rate for business purposes. Income around £35000. Was offered £7000 at 13.7%. The whole thing seems a complete lottery. My business bank, Lloyds TSB, can do better. I was disgusted. What a huge disappointment!!

FunBrum

Hi

My experience with personal loans has been great.

Last year I decided to buy a brand new car and was going to pay cash for it. It just so happened that Ford had an offer on for 0% finance. I
viewed the car, managed to talk my way into a hefty £1500 discount, and picked it up 7 days later. I pay £240 per month interest free for 3yrs and I can pay it off if I choose at no redemption charge, but why bother.... I'd rather my money was earning me interest?!
Also I have just recieved an unsecured loan from Egg for £25,000 at 6.7% for 7yrs which is flexable and with no redemption charge if I again choose to pay it off. I'm paying back £374.01, and it only took 5 working days to process. It is now sitting in my ING Direct account earning 4.7% til I decide to pay for my home improvements.
My annual income is £29,000 and I have a good credit record, plus I have been card tarting for 2yrs and loving it!

I can't believe how easy it is to get these loans...scarey really isn't it?!!!

FunBrum

monkeylugs

Loan requested: Alliance & Leicester car-loan. Rate of 6.9%. Amount requested £ 7000 over three years. 2-year-old car worth £8600 using 5-year-old, high mileage car as part-exchange.

Background: I have a default from 2000 at £1800 which was satisfied June 2003. Husband has a clean credit history but obviously we have the financial association problem.

Relationship with A&L: Current account, savings accounts & ISA. For some reason (I presume because of my default) they have never allowed us to upgrade to their premier account.

Result: LOAN OBTAINED! (swoons in amazement). Applied at 11am on Monday, accepted at 2:30pm the same day. Agreement papers arrived Tuesday morning. Money in bank account on Thursday.

Excellent service from A&L, not a bad rate of interest (compared to that in 2001 when we had to borrow £1000 from the Associates at 41%!!!!!!).

System

Just been accepted by Egg, £15k at the advertised 7.9%, and transferred £6k business o/draft to Egg card on the 0% anniversary offer. No early repayment penalties, and Egg people were nice to deal with.

How about a lobby from MSE to improve transparency on these "special offers". Don't forget that each application when shopping aroundcould be recorded by the credit rating agencies, even if you don't accept, and this may reflect in future applications.

skg959

i might be able to clarify a few points on this forum as i work in this field.

and no, i'm not telling you who for!

if you "apply" (i.e. get a quote over the phone) you WILL be 'credit scored' this will be based on an experian/equifax score (to look for fraud, CCJs, missed payments, outstanding credit) coupled with in-house scoring which is the result of the answers you give over the phone (home owner/salary etc) and this search WILL be recorded at the credit reference agencies.

this last part should be made clear by the company you are calling because lots of applications=lower scores= poor APR quotes; so you try more compaines=lower scores=poor APR quotes (can you see where this is going!)

the typical rates advertised are supposed to represent the APR which the majority of successful applicants receive. if they advertise 6.9% but offer you 12.9% it's because your APR is based on your "personal circumstances", that sounds good, doesn't it!

what it actually means is that your APR is based on 'rate for risk' if you are considered a higher risk you get offered a higher rate.

oh! and employer checks are regularly made. yes they will call your employer if the underwriters think they need to check. i.e. you sound suss/claim you are a bin-man on £25,000 p.a.

and for s kint who got a RBoS loan at a good rate but a crappy one from Lombard. RBoS own lombard so they defo use ALL of the same systems to assess you.

the 'bar' is just set at a different 'height' for different companies even if they are all under the same umbrella.

just don't go applying gung-ho for loans people, you are raising your own APR quotes if you do this excessively.

simonfr

Northern Rock advertised rate is 5.9%, i got offered 7.9% >:( >:(. This was a £20k loan over 10 years. Twas to convert mortgage into loan.
Hmm dont think i'll be taking that one.........