My bad experience with Sainsburys loan application

Canon_Dad

Just wanted to share my experience to let others know.

I applied for Sainsburys 4.4% loan, I completed everything online after which I was told it would take 60 seconds for decision, I was then greeted with a message that said it will take 72 hours and do not contact before then as we won't have a decision. 12 hours later I get an email to say decision will be 24 hours if I have not heard anything to call the 0800 number, surprise surprise no email so made the call.

30 minutes on hold to then be offered 6.5% Apr instead of the advertised amount. Needless to say I told them I felt mislead by Sainsburys and that they had wasted my time and turned down their rubbish offer.

I have paid off my mortgage and own the house, I have no outstanding loans and earn 37K per year basic. I have nothing owed on any credit cards and have no outstanding hire purchase etc. I have paid everything on time or early and have never defaulted on anything.

I do wonder if it's because it's the end off the month and they have hit their quota for the month at 4.4% otherwise they really are looking for the more than perfect customer to sell the 51% at the advertised rate.

Gaz83

You could be right about the quota. Is it maybe possible that because you've a history of paying things off early, they want to raise your interest rate as they don't think they'll get much money out of you?

Apples2

Sounds like there isn't much of a credit file to look at.
The same happens to youngsters with no credit history.

Mind you, with no commitments, why aren't you saving money to avoid the need for a loan?

d70cw6

same thought as above - with £37k salary (~£2400 per month) and no significant outgoings - you'd surely be able to accrue a nice pot of savings in a matter of months.

Clive_Woody

May just be end of month as you say and also the end of the financial year (early April). Possibly not the best combination of events.

The difference between their typical rate and what you were offered is not huge and in monetary terms I would imagine is quite small. There are many who visit this site who would kill for a loan at 6.5%

How much were you looking to borrow? Possibly if it was a larger amount they may have considered this a slightly higher risk.

Canon_Dad

I was originally looking at using money from an ISA but it worked out better value to go for a loan 36mths for 8K. The difference in rates worked out at an extra £300 in interest just over £800 in total.

I've decided to take money from an ISA instead and pay it back in as quickly as possible. Done us a favour in the end as no doubt after the amount is paid back into the ISA we will be in the routine of putting any saving there instead of a standard savings account, which I hate to say but had been doing and missing out on a return.

In the long run we should be in a better situation. Especially when our youngest goes into full time education and my better half goes full time.

DCFC79

6.5% isnt that bad, its not the 4.5 though but still its not bad. Agree with previous comments about no commitments why aren't you saving money to avoid the need for a loan.

Canon_Dad

I know 6.5 isnt all that bad but I felt quite annoyed at their tactics. Where they get you on the phone will a view to make more money than at first expected. I am fortunate that I'm in a position to turn it down and walk away. But that is only possible due to me putting some away each month.