M&S Loan Application - offered 9% rather than advertised 6% APR.

z80

Hello,

I applied for a loan from M&S. I was accepted, but at 9% not at the advertised 6%. I realise this does happen despite clean reports.

The loan was for £12000 to consolidate a car loan which is at a higher rate (9.6%). I mentioned purpose of loan as being consolidation, so is this taken into consideration when scoring? Or do they assume you are doubling your debt?

I have no missed payments on my report, no outstanding debt other than mortgage and the existing car loan. I do have a credit card with a zero balance with a 4600 limit on it, is this a negative factor?

I am not accepting the 9% so now looking elsewhere. Which is the main reason for my post. I am unsure if I should wait before applying again? Should I wait until the M&S application is officially cancelled?

Lastly, are there any providers which more often grant loans at the advertised rates? Are M&S generally good or bad on this front?

I am looking at Clydesdale as I have a bank account with them and their advertised loan APR is 6.2 just now. I see Derbyshire BS is another provider doing 6% now...

Thanks.

Tixy

z80 wrote: »

Hello,

I applied for a loan from M&S. I was accepted, but at 9% not at the advertised 6%. I realise this does happen despite clean reports.

The loan was for £12000 to consolidate a car loan which is at a higher rate (9.6%). I mentioned purpose of loan as being consolidation, so is this taken into consideration when scoring? Or do they assume you are doubling your debt?

They assume that you are doubling the debt - they always assume worse case scenario that you don't use the money for consolidation and so consider afforadability based on you having both debts to service.

I have no missed payments on my report, no outstanding debt other than mortgage and the existing car loan. I do have a credit card with a zero balance with a 4600 limit on it, is this a negative factor?

Its viewed as available credit that you could use (so they will to an extent consider if you could afford to service not only the 2 loans but also this card if you maxed it out)

I am not accepting the 9% so now looking elsewhere. Which is the main reason for my post. I am unsure if I should wait before applying again? Should I wait until the M&S application is officially cancelled?
Being officially cancelled won't show on your report. All your report will show in an application - and if you take the loan then in a month or so a new loan account will appear, if you don't then obviously it won't. Its not good to have lots of applications close together but a couple shouldn't hurt.

Lastly, are there any providers which more often grant loans at the advertised rates? Are M&S generally good or bad on this front?
All providers only have to offer the advertised rate to 51% of successful applicants. However M&S at the moment seem pretty tough to open new cards or loans with at all, even for people with a good credit history. The fact that you were offered a loan at all means they consider you a good potential customer.

I am looking at Clydesdale as I have a bank account with them and their advertised loan APR is 6.2 just now. I see Derbyshire BS is another provider doing 6% now...

Thanks.

Your own bank is often a good place to try if they are offering a competitive rate and if you've handled that account well.

z80

Thanks Tixy.

I'll probably close the credit card account then. One thing though, it is a Tesco credit card. Tesco is another option for a loan, so I wonder if having an account in good standing with them is beneficial here?

z80

I think I will contact the M&S underwriters to see what the decision was based on as a few have mentioned. If anyone has contact info for M&S underwriters it would be much appreciated.

opinions4u

Loans for consolidation are higher risk than most other unsecured loans.

This alone may have triggered the higher rate.

z80

I phoned and spoke to M&S who put me through to the underwriters.
There was nothing unexpected in their report, but they still wouldn't offer the 6%. So at least I know there was nothing else negative that they were taking into account.

So, I guess best not to state purpose as consolidation then? Is this a generally accepted view?

I'll keep this in mind.

paddyrg

Try zopa and ratesetter too - for peer-to-peer lending, sometimes you can get decent rates if your credit record is healthy

z80

In case it is of help / interest to anyone in a similar position, I applied for the same loan amount from Tesco and the loan was accepted straight away at the advertised rate of 6.1%

So it does look like M&S are best avoided at the moment as you can get much better rates elsewhere.

opinions4u

z80 wrote: »

So, I guess best not to state purpose as consolidation then? Is this a generally accepted view?

That's not what I said.

Lying on a loan application is fraud.

z80

Tesco's application process was a lot better actually.
It asks you about existing loans, and whether the loan you are applying for is intended to pay said loan off.

tambour

I also applied to M&S for a car purchase loan and was also offerred the 9% deal.However the first offer they made was for a totally different product and this application is now included in the searches made on my Credit Report along with the correct application and one from Sainsburys ( also declined). I have asked M & S to have the underwriters remove the first application made in error by me it would appear (?). They have agreed but have advised that it might take up to 30 days.
Surely this is excessive. Any way I can get them to try harder? Experian tell me that 3 searches within a short period is considered a lot so I am loath to make another approach before the first M& S application has been removed.Meanwhile my car purchase deal is up in the air.