First Direct Loan - 4% rate a con?

Oodoom

Hi there

A warning about First Directs 4% loan offer - dont expect a rate anywhere near that if they accept your application!

Im an existing customer (mortgage, credit card, current account) with no issues in my history and an excellent Equifax credit score. I earn mid £40s, have some credit card debt but thats it. In short, Im a pretty safe bet.

Today I applied for a loan with First Direct, went through the whole rigmarole, they did a credit check, and offered me a loan at 8.9%. Id have laughed my !!! off if I hadnt been so annoyed. I understand that the actual rate you get offered may be different from their headline rate, but more than double? Thats ridiculous.

Anyone else had a similar experience? With First Direct or any other bank?

So, now Ive got a credit search on my record for a loan with such a ridiculous rate that I dont want it - will this affect the outcome of another loan application with another provider?

Cheers

Adam

Apples2

The fact that you can't clear your credit card debt tells a different story.
If you don't have enough to clear the CC each month, they will consider a higher risk of you servicing even more repayments each month.

One search won't hurt, the general rule is three searches in a short space of time will hinder your application.

YorkshireBoy

How much were you asking to borrow?
How much is your monthly mortgage payment?
How much debt on the credit card(s)?...and is this also with First Direct?

R_P_W

Oodoom wrote: »

Hi there

A warning about First Directs 4% loan offer - dont expect a rate anywhere near that if they accept your application!

Im an existing customer (mortgage, credit card, current account) with no issues in my history and an excellent Equifax credit score. I earn mid £40s, have some credit card debt but thats it. In short, Im a pretty safe bet.

Today I applied for a loan with First Direct, went through the whole rigmarole, they did a credit check, and offered me a loan at 8.9%. Id have laughed my !!! off if I hadnt been so annoyed. I understand that the actual rate you get offered may be different from their headline rate, but more than double? Thats ridiculous.

Anyone else had a similar experience? With First Direct or any other bank?

So, now Ive got a credit search on my record for a loan with such a ridiculous rate that I dont want it - will this affect the outcome of another loan application with another provider?

Cheers

Adam

The rate you were offered isn't too bad!

It is not a con. The rate is representative and 51% of successful applicants get that best rate......

roubaix

I got the advertised rate with first direct. As said they only need like every other lender to give it to 51%.

I phoned them before I applied as I already banked with them and asked if they could see on their screen if I was preapproved and what rate. They could which meant I applied knowing the rate before a credit search was done. I believe other lenders will do that too if you bank with them.