Tesco loan

oliel

I have applied for a loan with tesco - mainly rate driven. I did this on the telephone today £12000 over 5 year - £233 per month £7000 debt consolidation, £5000 car. Joint application with my hubby, my score good 884 with experian hubbies excellent 999. Tesco have just said that its been referred to the underwriters and will hear from them in 48 hours. We have seen a good car and had a good offer on ours, My hubby took out a new credit card a couple of months ago and also got a new phone which required a credit check - despite it going onto my existing phone account. Is this why the loan is being referred? Would i have been better off applying with our own back first direct which we have been with for over 10 year? We have gone over our overdraft a few times lately - this is manly due to me not getting to a hsbc bank quick enough to pay money in as we live in the country and the nearest hsbc is over 17 miles away. Would first direct be more likely to approve a loan than tesco - if tesco refuse could i have a chance of being approved by first direct? Is it likely i will hear from tesco in 48 hrs?
any advice greatfully received.

BoGoF

First of all, forget your credit 'scores' it means nothing to a lender.

Recent credit card would be a negative as would the overdraft use - if it's recorded on your credit report.

chalkie99

7k existing debt plus a 12k loan = £19k

Even with no other debt and a squeaky clean record you need a joint income of £38k but credit card limits and hitting an overdraft may knock you back further.

As above, Experian don't lend money so the ratings don't mean much.

You might stand a better chance if you apply only for the amount needed to change the car but the chances are that Tesco will come back with a much higher than expected rate if they do accept you.

oliel

sorry chalkie i think you misunderstood me - i want to borrow £12k in total £7 to pay off existing £7k debt and £5 towards new car, this would be £12k debt in total.

BoGoF

Is this £7k a loan or credit card debt?

chalkie99

No misunderstanding here.

The lenders have absolutely no guarantee that you will actually use the new loan to pay down your existing debts so will look at your application the way i have listed it.

There must be thousands of people on this forum alone who have taken "consolidation" loans and then blown the money again and the lenders are well aware of that.

oliel

the £7 is credit card debt, the credit cards are first direct so i guess they could check as i bank with them - perhaps i should have applied with them instead of tesco? I have loads of equity in my house dont know if that counts?

BoGoF

I was going to make the same point as Chalkie, even if you were to clear the £7k CC debt - it's still available to you so you have a potential £19k debt.

The equity doesn't help unless you go for a secured loan.

oliel

ok, would i have been better to have applied with first direct? the rate shown was slightly higher hence why i applied with tesco - i had a loan previously with tesco that i paid off early too.

BoGoF

oliel wrote: »

ok, would i have been better to have applied with first direct? the rate shown was slightly higher hence why i applied with tesco - i had a loan previously with tesco that i paid off early too.

Impossible to say, but they are likely to have looked at the same sort of things, i.e. you could be £19k in debt

oliel

theres no way i want to be that in debt its a no brainer as far as im concerned will just have to see what Tesco say. No big deal if they dont approve it