Quick question regarding interest rates...

tomsaxton

I've managed to work myself into a fair amount of debt mainly due to not budgeting and being an idiot. It's three credit cards and a graduate loan that I took out a few years ago.

In order to reduce my monthly payments and make everything a lot easier I decided to take out a loan to pay off all of this (£8000). I went to Northern Rock and obviously they didn't offer me the rate of 5.7% (or whatever it is they advertise), instead they've offered me 8.4%.

Basically, my question is simple. Is 8.4% for a loan of £8000 over 72 months reasonable for someone with a (I reckon) below average credit rating or could I get a better deal elsewhere?

chani1

to be honest your credit score can't be too bad if you have qualified for a loan with them as they have a "high standard lending criteria" if you can't find a better rate what you could do is take it and make your py,ts for around 4/6 months then give them a call and ask to reschduale to try and get a lower apr this in my experience tends to work as they can see you are being a responsable payer and the fact that if you don't apply for any form of credit and make all your other bill commitments on time between now and the resched your credit score will improve by a few points too therefore getting a more favorable apr...hope that doesn't sound too confusing.

tomsaxton

Thanks for that. I've not actually tried to get a lower rate elsewhere though, as I was concerned that making more loan applications would damage my credit score further. Is this the case or do you think it's worth me shopping around a bit?

Good news about the possibility of rescheduling the loan to a lower apr after a while though, I didn't know you could do that.:T

tomsaxton

any further advice on this would be much appreciated

thanks in advance

tomstickland

It'd be worth looking at the comparison sites like moneysupermarket to see what other rates are out there.
Also go for the shortest term possible to reduce the interest you pay.

If you consolidate then keep records to make sure that you don't take up the new slack and end up in more debt.

tomsaxton

tomstickland wrote:

It'd be worth looking at the comparison sites like moneysupermarket to see what other rates are out there.
Also go for the shortest term possible to reduce the interest you pay.

If you consolidate then keep records to make sure that you don't take up the new slack and end up in more debt.

thanks. I already went through moneysupermarket but it just showed the best rates (that I obviously won't be offered) so I don't know whether to apply again to another company and hope that they'll offer me a lower rate than 8.4% or just to settle with Northern Rock.