APR of loan not what I wanted - OK to reapply thru another company?

hazysunshine

Hiya

I applied for a loan with Northern Rock for £15,000, which advertises an APR of 5.8%. I spoke to them today, and i've been accepted, but the APR is 7.9%.

This has upped my monthly payments and, obviously, the total amount repayable.

My question is this - there are other companies out there that offer similar low APR's (ie Masterloan 5.7%) - can I apply for another loan (for the same amount) and see if I get offered a better APR?

If I get offered a better APR, then I'll accept it, and if not, then I'll take the original offer from Northern Rock.

Now, will this completely screw up my credit score if I apply for £15,000 twice, with two seperate companies, within a week of each other?

Any help or advice would be much appreciated!

Cheers

Jimbo

MarkyMarkD

Nothing ventured, nothing gained.

You've already got the NR 7.9% in the bag, so you can try for lower rates elsewhere.

Presumably you won't be borrowing another huge amount very soon, so it will be obvious from your credit rating that the second (or first) £15k wasn't taken up.

thesaint

The 2nd lender will see that Northern Rock have searched your credit record, so I believe that you will have a problem getting another one approved.

Do remember that the rate they advertise may not be the one you are offered, they only have to give the advertised rate to about 70-75% of applicants.

Some companies advertise one rate that everyone gets if accepted. I know Nationwide used to do this, don't know if they still do.

hazysunshine

I hear what you're saying Saint - but can I take the approach that Marky suggests? Ive got NR in the bag, so why not try another??

Again, going back to my original post, will two applications for loans adversely affect my rating?

And, whilst Im talking credit rates, does applying for a loan decrease credit, but being accepted and making payments increase it?

Cheers!

MarkyMarkD

thesaint wrote:

Do remember that the rate they advertise may not be the one you are offered, they only have to give the advertised rate to about 70-75% of applicants.

66% if I recall correctly.

MarkyMarkD

jimbojet wrote:

I hear what you're saying Saint - but can I take the approach that Marky suggests? Ive got NR in the bag, so why not try another??

Again, going back to my original post, will two applications for loans adversely affect my rating?

And, whilst Im talking credit rates, does applying for a loan decrease credit, but being accepted and making payments increase it?

Cheers!

A bit of both.

Having lots of searches is bad.

Having too much actual debt may be bad, depending on your income etc.

Having some loans, which you service perfectly, which are sensible for your income, is probably good on balance.

In a year's time, it won't hurt you to have a well-performing £15k loan and a non-taken up £15k application, IMHO. But I wouldn't want to be looking for more debt immediately after a few £15k applications, whether or not they are taken up.

DavidHM

And I would add that the search would only stay on file for a year in any event so unless you're really looking to maximise all your credit, there's very little to lose.