Loan APR help please - in shock...

zoobyzoo

I'd be really grateful for some advice. Bit stunned, but have a horrible feeling I've been very naive.

I have been wanting to change my car since starting a new job six months ago far from where I live. Currently I'm spending about £600 per month on petrol. Having got my credit cards sorted out in Oct/Nov (0% balance transfer etc) I decided to wait a few months before applying for a loan to buy the car. So I applied for the M&S loan which was advertised at 6% APR, and I was approved just a few hours ago, but not at the advertised rate. I rang up, and the APR they offered me was... 16%! :mad:

I spoke to an underwriter and they mentioned a couple of things that may have affected this: a) the fact that I'd only been with my current employer for 6 months and b) that I'd applied for 2 credit cards in November (one of which was an M&S credit card I hasten to add).

Now I have only been with my employers for 6 months but that was because I've just had a promotion, and am now earning close to £75k pa. Prior to that I have been in continuous employment since leaving university 8 years ago. As for the credit applications, I applied at the end of October and deliberately waited for 3 months before I made this loan application so that it wouldn't affect me adversely.

I am really upset, and panicking now as I am haemorrhaging money from this car and was really hoping to change it asap. Ironically having made this application I imagine I'm even less likely to be offered a reasonable APR for loans any time soon

I'd be incredibly grateful for any advice offered. Just feeling very disappointed and worried about the future

Thank you in advance.

BoGoF

Not sure what you want to hear.....you either take the rate offered or you don't and look elsewhere. They've told you the reasons why you were offered the rate they did (which is unusual in itself).

In all honesty you haven't allowed enough time.....2 applications in November....giving it the 3 months you claim wouldn't be now.

Have to say if I earned £75k I wouldn't say £600 per month was a drain on my finances.

Have you considered finance through a garage?

talana

......and am now earning close to £75k pa.

With your income as above, unclear why you need a loan in the first place for this car?
Save for a few months then buy.
Or go for something smaller, cheaper and less of a gas-guzzler now.

zoobyzoo

I applied at the end of October and was approved in the first day or so of November, so yes it is actually a week shy of 3 months. And yes, £600 is a drain on my finances given my other outgoings. The question I am asking is if anyone has experience of these decisions being reviewed, or how long is appropriate to wait between applications. I did read on the site about waiting 2-3 months between applications which is what I thought I had done...

zoobyzoo

talana wrote: »

With your income as above, unclear why you need a loan in the first place for this car?
Save for a few months then buy.
Or go for something smaller, cheaper and less of a gas-guzzler now.

I haven't gone into detail about my expenditure, so my income is a bit of a red herring (other than the fact I can afford the loan repayments). Suffice to say that I do need a loan to buy a car, and the whole point is that I am looking to buy a second-hand, smaller, cheaper car!

BoGoF

Maybe it's your 'other outgoings' that are the problem then.

The full picture helps us give advice.

BoGoF

zoobyzoo wrote: »

I haven't gone into detail about my expenditure, so my income is a bit of a red herring (other than the fact I can afford the loan repayments). Suffice to say that I do need a loan to buy a car, and the whole point is that I am looking to buy a second-hand, smaller, cheaper car!

You'll find that saying "I can afford the loan repayments" doesn't work with lenders.

Sell your car, but a smaller, cheaper car.....

CLAPTON

how much do you expect to save per month in fuel for the car?
how much would your loan repayments be per month?

do you have any debts?
do you use your overdraft?
on the electoral roll?
property owner or renting?

talana

zoobyzoo wrote: »

I haven't gone into detail about my expenditure, so my income is a bit of a red herring (other than the fact I can afford the loan repayments). Suffice to say that I do need a loan to buy a car, and the whole point is that I am looking to buy a second-hand, smaller, cheaper car!

So for 6 months now you've been earning £75k pa, and you're basically telling us you have no savings to buy a cheap runaround?! :eek:

Sorry, but your expenditure very much is an issue then.

As for the loan, as Bogof said, you take their offer or you don't.

zoobyzoo

CLAPTON wrote: »

how much do you expect to save per month in fuel for the car? £300. I'd also be making substantial savings in terms of tax, insurance and general running costs
how much would your loan repayments be per month? £352 at 6%, but could go higher for a slightly higher APR

do you have any debts? 2 credit cards, paying off more than the minimum, and both will be paid off within the 0% period. Also a mortgage, and another loan which would be paid off from the sale of my current car and a little extra on the loan
do you use your overdraft? Yes, and I am being charged for it; part of the loan was to pay this off to obliterate the charges which amount to around £50 per month
on the electoral roll? yes
property owner or renting? Owner

To clarify, the loan amount will cover the cost of the new car, my overdraft and the balance on my existing loan. I have worked out all the costs and would be able to afford this, and changing my car would definitely make me better off. And I have also gone through the moneysaving guide/spreadsheet and reduced my expenditure heavily over the last six months.

Thanks for your time

tell_it_how_it_is

zoobyzoo wrote: »

the whole point is that I am looking to buy a second-hand, smaller, cheaper car!

Surely unless you're sticking large amounts in a Monaco bank account in the name of your dog, three months of saving less than half your £4k salary would allow you to buy what you needed outright?