Excellent credit rating - declined Sainsbury's loan

SjgGjb

Hi,
My situation is as follows and your help would be much appreciated.

I have a 9k loan with Nationwide at 13.9%.
I want to take a new loan at a lower rate over a shorter term to pay off this existing loan, hence, I applied to Sainsbury's.
I have been declined. I have never missed a payment on my existing loan. I earn £39 / annum (£50 O.T.E).

Why have Sainsbury's declined my application?
What are my options for getting a 'better loan' at a lower rate?

Many thanks.

Caz3121

Are you on the electoral role?
Any other debts - credit cards etc?
What do your credit files say?

SjgGjb

Hi, I am on the electoral role.
My experian report is 998 - 'excellent'. I have a credit card with Nationwide and settle the balance in full each month. I have no other accounts / store cards / debt etc. Thanks.

Pixie5740

Experian don't lend money so you can take any credit score they give you with a big pinch of salt. I hope you obtained that score through a free trial and aren't wasting £14.99 a month or however much Experian charge. I think what Caz3121 was asking was if there are any late payments, defaults, unauthorised overdrafts etc on your files.

You currently owe £9k and want to borrow another £9k albeit to pay off the original loan. That's almost 50% of your gross income which might be what's not making you attractive to Sainsburys as you also have access to the credit card.

I don't think nationwide charge early repayment fees although you'd need to check the t&c of your loan to verify that's the case. Just overpay the nationwide loan so that can kick this debt into touch.

SjgGjb

Hi,

Thank you for you advice! So, you recon it would be just better to over pay on my Nationwide loan rather than take another loan at a lower rate?
Just to answer your other question, I have never defaulted or payed late on the existing loan. I don't know what an unauthorized overdraft is??? :-)

Thanks again.

iolanthe07

I don't know what an unauthorized overdraft is??? :-)

It is when someone goes overdrawn by more than the overdraft limit set by the bank on his/her account.

Mysteek

I too applied for a Sainsburys loan last year when I received an invitation to apply at a really good rate. I have 3 credit cards which were becoming a burden due to the ever increasing interest rates and I wanted to put them all onto one loan at a cheaper interest rate. I was refused a loan even though I have never missed or been late on any of my credit cards or anything else for that matter. A few days later I received a call from a loan company saying that sainsburys pass on all their refused loan applications to see if they can help. I asked the guy why I had been refused in the first place but couldn't or wouldn't give me a specific reason but said it could be because of the amount of credit I already had. He did say that only a very few ppl were accepted by Sainsburys. I explained that the new loan was to replace this debt and not to add to it, I had no intention of increasing my debt but to decrease the interest so I could pay it off quicker. He said it didn't matter. He went through all my stuff with me and offered to put all my 3 credit cards onto a loan secured on my house. I said no thank you, I didn't want to lose my home for the sake of credit cards.

AndyT678

Mysteek wrote: »

I explained that the new loan was to replace this debt and not to add to it, I had no intention of increasing my debt but to decrease the interest so I could pay it off quicker.

That's what everybody says. It rarely works and lenders know it.

Clive_Woody

Mysteek wrote: »

I too applied for a Sainsburys loan last year when I received an invitation to apply at a really good rate. I have 3 credit cards which were becoming a burden due to the ever increasing interest rates and I wanted to put them all onto one loan at a cheaper interest rate. I was refused a loan even though I have never missed or been late on any of my credit cards or anything else for that matter. A few days later I received a call from a loan company saying that sainsburys pass on all their refused loan applications to see if they can help. I asked the guy why I had been refused in the first place but couldn't or wouldn't give me a specific reason but said it could be because of the amount of credit I already had. He did say that only a very few ppl were accepted by Sainsburys. I explained that the new loan was to replace this debt and not to add to it, I had no intention of increasing my debt but to decrease the interest so I could pay it off quicker. He said it didn't matter. He went through all my stuff with me and offered to put all my 3 credit cards onto a loan secured on my house. I said no thank you, I didn't want to lose my home for the sake of credit cards.

Out of curiosity which company did Sainsburys pass your details on to that tried to get you to convert credit card debt into a secured loan?

You definitely did the right thing, secured debt is best avoided if at all possible.

Mysteek

TBH Clive I can't remember the name, it wasn't a name that I recognised and he said it very quickly. I didn't feel comfortable speaking about personal financial matters on the phone with someone I didn't know or didn't ask to call. I just assumed that if sainsburys had passed my name to them they must be ok. I only told them what the loan was for and the amount, I didn't tell him what my income was or information of any other outgoings but he was still able to offer me a secured loan.

Mysteek

So what you're saying AndyT678 is that loan companies assume that everyone is a liar and dishonest and trying to pull a fast one!