Loan refused, is this right?

Whiterabbit29

Hey,

can anyone help me with this one I could be really dense! short story im getting married and wanted to borrow money to fund the wedding, then got my experian credit score which put me as excellent and applied to sainsburys bank for a loan for £7.5k they knocked me back stating "on this occasion you did not meet the criteria" but offering me a god awful high rated loan with home shopping personal finance at a rate of 19.9%.
im proberly just annoyed that they have casually knocked me back and then had the cheek to offer me another loan with one of their "sister" companies which will cost me twice as much, it just seems the low rates advertised where just a line to get me in so they can offer a higher priced loan and now my chances to get credit elseware will be compromised by the searches they have done on me.

anyhow im sorry i lied it wasnt a short story, does anyone have any advice on what my options are now? how long should I wait before applying for another loan or should i just ditch the borrowing idea all together?

marydot

I know its nice to be getting married and you want a nice wedding and everything to be perfect, but loans are the worse thing to get involved with and if by chance you miss a payment thats when the troube starts, interest starts getting higher and higher and if you lose your job or something happens where you fall behind thats when it can get out of hand.

I would never take a loan out ever again.

jonesMUFCforever

Have you no savings at all?
There was a very similar thread on these boards recently - I will give you the same answer - you are mad to spend £7.5k on one day - the marriage could fail before you have finished paying for it!

hairbrain05

isn't there a chance that the original poster is in a position to afford a loan & has weighed up the pros and cons along with affordability etc?

unfortunately i dont have any advice on why you've been offered a higher cost loan and the effect that may have impacted your credit file by the searches conducted - hopefully someone will come along with some advice for you!

[Deleted User]

if you have to take the "higher rate loan" why not borrow less,and cut back on some of the wedding expenses,trust me big expensive weddings are ok on the day but its the rest of your lives togther that matter more !

RobertoMoir

Whiterabbit29 wrote: »

Hey,

can anyone help me with this one I could be really dense! short story im getting married and wanted to borrow money to fund the wedding, then got my experian credit score which put me as excellent

But means very little as lenders use their own scoring criteria.

Whiterabbit29 wrote: »

and applied to sainsburys bank for a loan for £7.5k they knocked me back stating "on this occasion you did not meet the criteria" but offering me a god awful high rated loan with home shopping personal finance at a rate of 19.9%.

Thereby making my point about lenders using their own scoring criteria, not those of the credit checkers.

Whiterabbit29 wrote: »

im proberly just annoyed that they have casually knocked me back and then had the cheek to offer me another loan with one of their "sister" companies which will cost me twice as much, it just seems the low rates advertised where just a line to get me in so they can offer a higher priced loan and now my chances to get credit elseware will be compromised by the searches they have done on me.

Your chances to get cheap credit elsewhere will be much more compromised by whatever reason Sainsbury's turned you down over than one search on your history.

They haven't turned you down for the lols.
They haven't turned you down because the person processing the loan has decided they hate your first name.
They haven't turned you down as part of some machiavellian plot to force you to get a loan off some other more expensive lender because both companies are owned by Doctor Evil and they need your higher rate interest payments to fund giant laser beams...

... They simply feel that you either can't afford the loan you have asked for*, or that you are a poor risk for other reasons, and the alternative company's higher interest rate is how they manage loans they see as a poor risk.

* this has nothing to do with whether or not your credit rating is "healthy", as such, but let's say you say your income is £20,000 a year, you already have... oh I dunno, a car loan or credit card debts of £4k and you've applied for £7.5k, meaning your total borrowing would be 11.5k or about 58% of your yearly income. Most reputable loan companies would say that this is too high a number and refuse because of that, not because of your credit rating.

Whiterabbit29 wrote: »

anyhow im sorry i lied it wasnt a short story, does anyone have any advice on what my options are now? how long should I wait before applying for another loan or should i just ditch the borrowing idea all together?

You've already had the choir of suggestions to ditch borrowing completely, and I agree with them. However I would add - why not try your own bank. They often look upon their own customers lending fairly favourably as they know a lot more about your financial affairs than others, and they like keeping customers fairly happy and they really like making a profit off your business.

ERICS_MUM

Putting aside the whys and wherefores of your problems with Sainsburys, I would really advise against borrowing to fund a wedding. My personal approach to borrowing has always been to match the debt with the "life" of the thing you get the loan for:

long term borrowing for a long term asset / investment (buying a house, home improvements etc)

medium term borrowing for "necessary" reasons where the loan will be fully repaid before or at the same time as the item funded is no longer needed or viable (e.g. buying a car)

overdraft / credit card - for unexpected but urgent short-term expenses that will be paid back within the next couple of pay-days

Savings - for short term events (weddings, holidays) and luxuries (TV, camera, designer handbag etc)

No savings - no luxuries or short term events


Linda :beer:

housebuyer_abc

ERICS_MUM wrote: »

Putting aside the whys and wherefores of your problems with Sainsburys, I would really advise against borrowing to fund a wedding. My personal approach to borrowing has always been to match the debt with the "life" of the thing you get the loan for:

long term borrowing for a long term asset / investment (buying a house, home improvements etc)

medium term borrowing for "necessary" reasons where the loan will be fully repaid before or at the same time as the item funded is no longer needed or viable (e.g. buying a car)

overdraft / credit card - for unexpected but urgent short-term expenses that will be paid back within the next couple of pay-days

Savings - for short term events (weddings, holidays) and luxuries (TV, camera, designer handbag etc)

No savings - no luxuries or short term events


Linda :beer:

Obviously I'm sure Linda meant the day itself is a short term event - not the marriage

RobertoMoir

housebuyer_abc wrote: »

Obviously I'm sure Linda meant the day itself is a short term event - not the marriage

Hopefully ;-), but that typo aside it's pretty good advice which I may nick and re-use myself for other posts here. It's the sort of borrowing strategy you think ought to be common sense but seems to pass a lot of people by these days.

Rafter

Back to the original question.....

Suggest you try your bank, but also double check the following list for reasons why they might have rejected you....

Do you already have credit card balances or even large limits that are unused?

Have you recently changed jobs or moved house?

Are you on the electoral roll?

Is your job 'high risk' ie you are self employed or in a sales job?

Is £7,500 quite a lot compared your your income or your joint income with your fiancee?

A joint loan might get accepted more easily?


Only further comment about what others have said..... Weddings are expensive - it is just one day - and you don't want to be paying it off for many years to come. Having just paid off mine after 2 years, I'm happy that was the right decision - but any longer and I might be wondering why I invited some people or where I could have spent less without making the day any less special.

Good luck

R.

ERICS_MUM

housebuyer_abc wrote: »

Obviously I'm sure Linda meant the day itself is a short term event - not the marriage

I sure did! In my defence I was careful to say the wedding was a short term event, not the marriage itself ! (phew, got myself out of that OK :T)

Linda XX