HSBC will not give loan at advertised rate

sparky1985_2

hi, i am new here, bit unsure how it all works,:(
my problem is with HSBC, who after over 12yrs of banking with them and absolutely NO problems,no late payment etc, they cannot let me consolidate my existing loan, with a new one at the advertised 3.7% interest, they keep offering me at 17% plus.
apparently the higher offer is based on several factors,expiren credit score (which is good), internal credit score, which they cant say why its affecting the application. and other factors, which they cant explain or pinpoint ....:mad:
getting the lower rate will significantly reduce my existing balance and reduce my monthly payment.
does anyone know or experience any similar situation, or should i just up n move to another bank, dnt actually know were to start with that
thanks for your help:T

lindens

Its probably because you are consolidating. They dont know for sure you will pay off the other loan, and consolidation loans are usually charged at much higher interest than other bank loans.

DCFC79

The bank cant see the experian credit score, they must refer to your credit history.

CHR15

You can't be a low risk if you are already in debt to the extent you need to consolidate.

Tixy

The rate is based on risk based lending.
They are prepared to lend to you but believe that you are fairly high risk given all that they know about you and so set the rate accordingly.
They only offer the lowest rate to the people they think are at the lowest risk of defaulting on the loan. 51% of successful applicants are offered the advertised representative APR.

You could see if a different lender may be prepared to offer you a loan at a better rate. But be wary of making lots of applications to different lenders, as a lot of credit applications in short period of time is often considered to be a further indicator of risk by potential lenders, and they find it harder to assess your finances as they won't know if you have just taken out lots of new credit agreements.

You may want to try obtaining a quotation search from nationwide. They are one of the few lenders who offer a quote based on a soft search of your credit file, not a full search.

jonesMUFCforever

The advertised rate is always stated ''from'' x% and will be subject to their T&C which will involve a credit search.


If you think you are being treated unjustly by HSBC have you applied elsewhere for a loan?

27col

I'm assuming that your existing loan is also with HSBC. If that is the case, why do you think that they would be willing to allow you to refinance your loan at a cheaper rate. There would be absolutely nothing in it for them. Regardless of any questions of credit worthiness.

iolanthe07

I second what 27col states. Always remember that banks are not there to help you; they are there to take money off you, one way or another.

Pixie5740

There are lot of factors which determine what rate a lender is prepared to give you. Not all of it is based on your credit history...for example why would a lender want to give you another loan at a lower APR than the loan you already have with them? Nobody at HSBC is going to tell you the criteria they use to "score" potential customers otherwise people would just poggle the application to fit the criteria.


Is this your first debt consolidation loan or are you currently in a spiral of consolidating, accruing more debt, consolidating again, accruing even more debt and so on? If so then rather than trying to consolidate you should head over to the Debt Free Wannabe board and get help and support to deal with the root cause of your debt. You'll be much happier for it.

Thrugelmir

sparky1985 wrote: »

which they cant say why its affecting the application. and other factors, which they cant explain or pinpoint ....:mad:

Lenders use complex algorithms to derive the computed risk. So there's no straight forward answer.

Consolidation as a purpose though is like waving a red flag. Statistically people doing so will suffer financial distress. Job loss, health, relationship breakdown, reduction in income. Any number of factors can trigger the slide down the slippery slope.

The problem is yours to solve not others.