Not accepted for the same loan as last month?! Help

sterut

Hmm, can someone help me with my issue please?

I'm currently looking at buying a 2nd hand car and selling mine. Although i dont have the specific car in mind i am willing to pay between £9k & £11K for the car. I am not sure whether to trade mine in or whether to sell privately... i'm telling you this because until i pick the specific car and sort out the deal with the garage / private seller i won't know exactly how much i want to borrow. I was told by M&S loans that if i applied and got accepted for £10,500 then i coudl always reduce it to if i needed to.

I applied for a 6.9% loan in March for £10,500 through M&S and got accepted no problem at the lowest rate.

I also noticed a loan deal from Sainsburys which offered 7.2% but gave me double nectar points for 2 years - so i applied for this also as an alternative option. They accepted my on this but for a higher rate - so i declined and asked them to cancel the loan application - which they did i believe.

I still hadn't chosen a car i wanted and my original M&S loan application lapsed so i reapplied for the lesser figure of £9k yesterday (as i can borrow £2k from my dad until i sell my car privaetly and hopefully get more money).

The email arrived this morning from M&S to say i haven't been accepted. After i called them they said they could offer 10.9% !!!

Is it because i have applied for multiple loans? How long is it till i can get the best rate again? (i'm sure my credit rating is excellent). I can't unapply for the loans so how do i get the better rate? And by applying for another loan will it just get worse, i cant see if i have been accepted without applying for loans?!?!?! Chicken & Egg!

All my credit cards are set to pay the full amount each month, although there has been more money on them in the last 2 months if this matters.

Thanks in advance for any advice


Steve

Tixy

The multiple applications probably are affecting the rate you are being offered - but also it could be just a small change in policy and lending criteria that has altered what you have been offered. And if the balances on your cards has altered at the point they were reported this month compared to last this also could have contributed to the change. The lower amount requested could also have had an effect - so it was probably not one thing that has changed that you can correct or alter but a combination of things.

No guarantee you will be offered the best rate again. As you've now had a number of applications your best chance would be to wait another 6months so your file is clear of recent applications and to ensure your card balances are kept low.

If you still hadn't chosen a car I'm not really sure why you applied again recently, rather than just waiting until you had found a car you wanted to buy.

sterut

Hi Thanks for the reply. I think you are right in what you say i have been asked to wait 6 months to reapply, which seems ridiculous to me?

Probably very naive on my part, but the reason I reapplied for the loan because i have seen a car and i wanted to know that if i put a deposit on it then 1. i could still get the loan, and 2. that i would get the rate wanted (or i'd apply elsewhere).

I didnt realise applying for a loan would affect my credit scor so dramtically especially as i hadnt accepted the loan, i just thought i was keeping my options open (workngly it seems!).

It seems bizarre that having not accepted and cancelled the loans (so the money is not available to me even if i wanted it) that i cant get a good rate. I cant find out the exact reason why i cant get the good rate and if i apply anywhere else i will probably make it all worse.

Obviously i dont want to wait 6 months to reapply again, is there a way around this?

paulmcerlean

No.

You now have multiple searches on your credit file and this will jack up the APR on future applications and cause declines. You need to wait 6 months as the searches will no longer be 'recent'.

Applying for one loan does not affect your credit score dramatically, applying for THREE in a short space of time does however.

[Deleted User]

paulmcerlean wrote: »

No.

You now have multiple searches on your credit file and this will jack up the APR on future applications and cause declines. You need to wait 6 months as the searches will no longer be 'recent'.

Applying for one loan does not affect your credit score dramatically, applying for THREE in a short space of time does however.

...thereby demonstrating the absurdity of the system!

I believe this issue was raised by several MPs recently; it seems ridiculous that consumers cannot 'shop around' for the best deal.

The solution is obvious: if a consumer decides not to take a credit offer then the search should be removed from their file. Only accepted offers and agreements or failed searches should remain.

sterut

Holy Pants!

Looks like i've shot myself in the foot then. I was shopping around for the best deal, and yes it is ridiculous!

I can understand not being able to be 'accepted' by multiple loans in a short space of time, but for me to cancel them and still be majorly affected by them ... for 6 months ... when i have an excellent credit rating (or used to) is unreal!

(

WellKnownSid

There is nothing preventing you shopping around, just as long as you don't actually apply.

The problem comes where tighter loan criteria means that you don't get the advertised rate when you do apply. At least this wasn't the case when you put in your first application, but clearly was when you applied for loan numbers two and three!

Cash_Flow

WellKnownSid wrote: »

There is nothing preventing you shopping around, just as long as you don't actually apply.

The problem comes where tighter loan criteria means that you don't get the advertised rate when you do apply. At least this wasn't the case when you put in your first application, but clearly was when you applied for loan numbers two and three!

How can you shop around when the only way of finding out how much your going to pay back is to apply for the loan?

sterut

Exactly you don't know what rate you will get until you apply, it's a catch 22.

I'm sure this must be a very common problem, is there a way around this that doesnt mean i have to wait 6 months, like lending from my bank for instance or do all lenders have the same criteria? It seems barmy.

Or the ombudsman?

WellKnownSid

Cash_Flow wrote: »

How can you shop around when the only way of finding out how much your going to pay back is to apply for the loan?

The OP could have gone to a comparison website and found the cheapest loan, without applying. I remember doing that when I applied for a loan about 12 years ago, so there must be plenty around these days!

As I say the issue is whether or not the OP would qualify for the headline rate... but the irony is that they DID qualify for the headline rate, only to lose that by making other applications.

sterut

yeh i did qualify for the best rate but was still in a catch 22 position.

1. i needed to know i could get a loan before i could purchase a car (so i applied to see)
2. i needed to see a car i wanted in order to know how much i needed to borrow
3. when i knew which car i wanted i then had the option of selling my car privately (for more money) or trade for less money (for convenience), depending what deal i would get from the seller.

I was trying to cut down the variables so if i saw a car i could put a deposit down, then buy it.

The irony is, i saw a car whilst the loan rate was active, tried to buy it but the guy wouldn't get back to me, when i actually got hold of him again after about 5 calls and 3 voicemails it had been sold!

The whole thing sucks really, it's not rocket science, it's obvious i have a good credit rating, why i can't apply for a loan and then cancel is beyond me!