My bank scaring me into not shopping around?

Redford

I'm looking for a consolidation loan of £12,500, £5,000 of which is to pay off my (arranged) bank overdraft, the rest to settle other loans. My bank quoted me an APR of 22.8% based on my financial history with them, and repayments over 7 years. I said I'd like to shop around which they said was fine, but warned me that if an application elsewhere was declined, it would be a black mark on my credit record and if I then went back to my bank to go ahead with their offer, it might be refused as a result. So by shopping around I'm reducing my chances of getting a loan at all!

Firstly am I right to be concerned about applying elsewhere if I get a better offer, in case it's declined and I am as a consequence refused by my own bank? I have had bad credit in the past but this is now clear from my record and my Credit Expert score was I think 97% last time I checked. The only questionable part is that I have been maxed-out on my arranged overdraft for a few years now.

I really want this loan and don't want to risk not being accepted anywhere. Any advice on how to proceed gratefully appreciated.

[Deleted User]

Searches do - or at least can - temporarily impact your chances of being accepted.

You need to decide if the rate on offer puts you in a better position and whether you feel like chancing your luck elsewhere.

Tixy

Each credit search does appear on your credit file and can have a short term impact on your ability to get credit.

You could try a company that has a soft serch option (nationwide).

Are the debts you are thinking of paying off with the new loan all more than 22.8% APR?

dotdash79

How badly do you want the money?

You might try another provider get knocked back then your bank refuse you. But if you wait 3 months then these searches have less relevance so you could try again.

I don't think 2 or 3 searches will be that bad. but even 22% says you are on the edge of being refused. Another option is to take it and refinance in 12 months if you think you can.

Have you got any adverse on your file?

dealer_wins

OP if you do decide to re-finance, make a stern promise to yourself to not touch another drop of finance (Including Credit cards, loans, HP, store cards, car loans, further advances etc) until you finish paying the whole 7 years repayments.

And if your circumstances improve, start putting an additional sum into a savings account, so that you build up funds and never have to take out credit again in your whole life.

It will literally save you thousands and thousands of pounds that you are currently giving to the banks.

CLAPTON

what are your current debts
and what are their APRs?

how much do you earn?

DCFC79

Redford wrote: »

I'm looking for a consolidation loan of £12,500, £5,000 of which is to pay off my (arranged) bank overdraft, the rest to settle other loans. My bank quoted me an APR of 22.8% based on my financial history with them, and repayments over 7 years. I said I'd like to shop around which they said was fine, but warned me that if an application elsewhere was declined, it would be a black mark on my credit record and if I then went back to my bank to go ahead with their offer, it might be refused as a result. So by shopping around I'm reducing my chances of getting a loan at all!

Firstly am I right to be concerned about applying elsewhere if I get a better offer, in case it's declined and I am as a consequence refused by my own bank? I have had bad credit in the past but this is now clear from my record and my Credit Expert score was I think 97% last time I checked. The only questionable part is that I have been maxed-out on my arranged overdraft for a few years now.

I really want this loan and don't want to risk not being accepted anywhere. Any advice on how to proceed gratefully appreciated.

What's your salary ?

Consolidation loans dont exist as such, people use a loan to pay off x debt here, x debt there etc.

Everyone else has offered some good advice.

worried48

I got a consolidation loan recently - wasn't expecting it, didn't intend to ask for it, just talking to some bank person on the phone as I thought I had a security stop and mentioned that I was trying to clear some credit cards that had very high interest so I was making extra payments. He suggested a 0% balance transfer card, I said I was sure I wouldn't be accepted but why not try, I wasn't accepted but was offered a loan for 7k at 16.9% over 3 years - this is a lot lower than any APRs I was paying. On the form, the purpose was given as "personal expenditure" which surprised me a little.
I was surprised to get it because my Noddle credit rating is only 1 out of 5. And yes I will be careful not to fall into the usual trap!

Redford

Tixy wrote: »

Each credit search does appear on your credit file and can have a short term impact on your ability to get credit.

You could try a company that has a soft serch option (nationwide).

Are the debts you are thinking of paying off with the new loan all more than 22.8% APR?

The main debt is a loan on which I'm paying 13.5% but it's shown on the statement as "interest rate applicable" so not sure if this is the same as APR? I had a bad credit rating (CCJ's & default notices) at the time I took out the loan, so I was surprised my bank offered me 22.8% now that I have a good rating, doesn't make sense to me!

Redford

dotdash79 wrote: »

Another option is to take it and refinance in 12 months if you think you can.

Have you got any adverse on your file?

Refinance in a year sounds like a good idea, even if I am refused, the black mark on my file won't matter (at least in the short term).

Redford

dealer_wins wrote: »

OP if you do decide to re-finance, make a stern promise to yourself to not touch another drop of finance (Including Credit cards, loans, HP, store cards, car loans, further advances etc) until you finish paying the whole 7 years repayments.

And if your circumstances improve, start putting an additional sum into a savings account, so that you build up funds and never have to take out credit again in your whole life.

It will literally save you thousands and thousands of pounds that you are currently giving to the banks.

Sound advice thank you.