First Loan Ever ... 29.9 APR from Bank?

Ciwan

Hello

I am a 27 year old man in full time employment earning £35K a year as a Software Developer.

I plan on getting married soon and would like to borrow £10K.

I have a personal account with TSB, and I just used their loan borrowing tool online and it says if I want to repay the money over 24 months, I have to pay back £12,988.32 at 29.9% APR.

If I'm not mistaken this is extremely high! Is there a better way? Can I get loans from other banks that I do not have accounts with? If yes ... do I just walk into the bank and ask for a loan?

Any help and advice would be greatly appreciated.

Thank You.

BillJones

It's a high APR, yes, but far less than other lenders might offer. Yuo can definitely see if you get a btter rate elsewhere, but normally your own bank, who know you best, will be one of the better offerings.

A reason for a high rate is that they believe that you may well strugge to pay them back, and affordability can be the issue here. You are telling them that you have over £500 spare per month for the payments, so presumably you've been saving that much so far towards your wedding costs? If not, do you know were you'll be making savings in future to meet these payments?

Pixie5740

This is your first loan but have you ever had any credit in the past before? If not then lenders don't know how you deal with debt so that might be one explanation for why the APR is so high.

CLAPTON

sounds like a bad idea to start a marriage with a 10,000 debt

Ciwan

Thanks for the replies guys. I do have a good credit score. I pay all my bills on time, use my credit card regularly ... etc.

DCFC79

Ciwan wrote: »

Thanks for the replies guys. I do have a good credit score. I pay all my bills on time, use my credit card regularly ... etc.

Credit score, you mean the figure given by Experian or Equifax, its meaningless if you didnt know.

Ciwan

Oh! no I did not know it was meaningless! So is the term 'Good Credit' also meaningless?

Also, are there better offerings anywhere for this loan?

Thanks

Fruit_and_Nut_Case

Ciwan wrote: »

Oh! no I did not know it was meaningless!

It's meaningless in the sense that potential lenders do not see it.

Gaz83

Possibly down to affordability. Having a £35k income (let's say £25k after tax / NI etc.) is no good at all if you have £25k outgoings. How much spare cash do you have at the end of a month, and what have you been doing with it? You would possibly find the APR would drop if you had a couple of thousand pound of savings (and you'd possibly need to borrow less, as well).

Ciwan

At the end of the month I have something like £700 left, after paying all my utilities, rent and direct debits.

[Deleted User]

Ciwan wrote: »

Oh! no I did not know it was meaningless! So is the term 'Good Credit' also meaningless?

You apply to a lender, they retrieve your credit information (the money that you owe, the defaults (if any) that you have, the accounts you have access to) then they take that in conjunction with your salary and work out if they believe that you are a "good" customer for them, a good customer is someone that will be profitable for them. There is such a thing as "good credit" (no defaults, low utilisation) but there is no universal score. A company like Experian will take a look at your credit history (as a lender would) and then says "based on our algorithms you have a score of 800!" but that's a score only Experian know about. Don't pay for credit scoring, it's a waste of money.

Ciwan wrote: »

At the end of the month I have something like £700 left, after paying all my utilities, rent and direct debits.

If you're ending the month with at least £700 you would be much better off saving, taking on a £12,000 loan for a want (wedding, honeymoon) is financially irresponsible. Save up, it's much better to start married life without debt hanging over you.