Improved credit rating/refinancing

brightonem_2

Hi all. I'm a bit clueless when it comes to loans and suchlike..
I recently took out a loan with HSBC to refinance. I had an existing loan with them-amongst other debts. Due to a poor credit rating the loan I received was at a much higher APR than expected, and as a result I couldn't borrow the full amount needed to pay off other debts, and I'm paying off more monthly than I want to be.

I since signed up for Experian credit report and I've noticed my credit rating go from fair to good. I'm not sure how accurate this is, and what it means exactly, as far as lenders are concerned, but I'm wondering how likely it is that I can now take out a loan with someone other than my bank- at a lower APR to refinance the new one? Also- the amount I borrowed was £9500, but the amount payable is £1350 If I were able to get a loan with a different company is £1350 the amount I need to borrow or do I just pay off the £9500 with my bank?!?

stator

You would need to get a settlement figure from HSBC to find out how much your new loan would need to be. It would be somewhere between £1350 and £9500.

The experian credit score is meaingless since every lender uses their own criteria. Get copies of your full credit report from all three providers and check it for accuracy. Also check you are on the electoral roll.

dealer_wins

I would continue to pay your existing loan (which hoovered up all your other debts), and on its completion never take out another loan ever again.

Then you can stop worrying about your credit score and interest rates, because those nasty bankers wont be taking any interest from you ever again!!!

Pixie5740

Stop borrowing money. Just focus on getting your debts repaid as quickly as possible starting with the debt with the highest APR.

http://www.whatsthecost.com/snowball.aspx

Get yourself over the Debt Free Wannabe board for support and advice too. It's chock-a-block of people who have been where you are now.

The Experian credit report rating is pointless as Experian don't lend money. If you're paying to get your credit score then stop and use that money to pay off your debts faster.

brightonem_2

Thanks. I realise I wrote £1350. Obviously meant £13,500...:( It's only one *actual debt now-just the loan. The debts I couldn't cover with the loan is money I owe my parents. I don't want to borrow anymore, at all, I just thought if there's a chance I could get a loan with a much lower APR from another lender to pay off this one then I wont need to pay off so much monthly and it will get repaid sooner! But that would only be if the amount I need to borrow is lower than the total amount I need to repay my bank...

stator

It possibly could be worth doing but you would have to compare the early repayment settlement figure on your current loan with the total cost of borrowing the new loan. However I think it's unlikely it will save you money.