Loan with high interest rate

stacey101_2

I applied for a loan of £14,000 through HSBC at their advertised rate of 4.9% over 5 years. It came back approved but at a higher rate of 15.9%.

This is to consolidate other borrowing and I earn just under £29,000. I have banked with HSBC for 12 years and have always got a good rate when borrowing from them, and never miss a payment.

I am now tempted to try somewhere like Tesco.

Has anyone else been in this situation and managed to get a low rate somewhere else after their bank only offered a high rate?

[Deleted User]

I'm surpised you got an offer at all on that amount, with existing debt and on your salary.

If you have a definite offer from HSBC, then there is no harm in trying elsewhere, but I doubt you will do better. Presumably 15.9% is better than your current rates?

bumblebee_tuna

I've done one worse - taken out a loan for £7500 with Halifax for 21.9%! I took it at the time as it got me out of a major hole, and consolidated several credit cards together - but its now slowly dawning on me that I'll be paying back over £4k just in interest. I desperately want to apply for another loan but as I have a chequered history (I got made redundant and missed a few payments a few years back) I'm scared no one will accept me, and it'll look even worse on my credit record....

Gaz83

The bank are only required to offer an advertised loan rate to 51% of applicants. If you're not a person with a particularly great credit history, then it's likely that you won't be offered an advertised rate but a higher rate to reflect the level of risk you represent.

Need to know some more information. What's your current credit history like (and I don't mean just the score)? How much debt do you currently have (prior to this loan being taken out)?

samantha.haugh.8888

Dear, there is nothing to be temped. 15.9% interest rate is quite reasonable considering current market situation.

iolanthe07

The bank are only required to offer an advertised loan rate to 51% of applicants.

No - it is 51% of successful applicants. There is a crucial difference between an applicant and a successful applicant.

Gaz83

iolanthe07 wrote: »

The bank are only required to offer an advertised loan rate to 51% of applicants.

No - it is 51% of successful applicants. There is a crucial difference between an applicant and a successful applicant.

Of course, that's what I meant to type. Apologies.

DCFC79

stacey101 wrote: »

I applied for a loan of £14,000 through HSBC at their advertised rate of 4.9% over 5 years. It came back approved but at a higher rate of 15.9%.

This is to consolidate other borrowing and I earn just under £29,000. I have banked with HSBC for 12 years and have always got a good rate when borrowing from them, and never miss a payment.

I am now tempted to try somewhere like Tesco.

Has anyone else been in this situation and managed to get a low rate somewhere else after their bank only offered a high rate?

Im guessing the high rate is due to the risk involved as your wanting to borrow close to 50% of your borrowing plus the debts you currently have so you might be lucky to get anything lower.

stacey101_2

Think I have decided against borrowing at the high rate and will concentrate on trying to pay some of my debts off before trying again!

Borrowing £14,000 for 5 years at 15.9% would have meant paying back £20,000 and that put me off!