Can't get advertised rates

buckmoy

Sorry if this is a noob question..

I'm seeing rates of 3.9% on the soft search for 15k personal loan, but when doing a proper application I'm only being offered 6.9%.

I have 8k on two cards, about 12k in a current account, and earn about 100k a year.

loan is to pay off credit cards and pay for a kitchen (which will also take up all of the current account cash).

I don't want to do any more proper applications and have too many recent searches on my record before understanding more.

Any ideas? Is it the cc debt which is adding risk and putting the offered rate up?

Thanks in advance

heartbreak_star

What kind of kitchen will cost you £20k?? *faints*

If it were me, I'd pay the cards off with the savings, close the cards, leave all that to register with the CRAs and then re-apply for the loan (few months time).

Well, actually, if it were me, I'd pay off the cards with the savings then save up for the kitchen. But if I were to go for the loan option, it would be as above

HBS x

PeacefulWaters

Is it the cc debt which is adding risk and putting the offered rate up?

While there could be numerous reasons, I'd suggest that this is significant.

MABLE

buckmoy wrote: »

Sorry if this is a noob question..

I'm seeing rates of 3.9% on the soft search for 15k personal loan, but when doing a proper application I'm only being offered 6.9%.

I have 8k on two cards, about 12k in a current account, and earn about 100k a year.

loan is to pay off credit cards and pay for a kitchen (which will also take up all of the current account cash).

I don't want to do any more proper applications and have too many recent searches on my record before understanding more.

Any ideas? Is it the cc debt which is adding risk and putting the offered rate up?

Thanks in advance

If you are using some of the loan to pay off debt and it is known when you apply then this could be reason why the apr is higher. I was made aware of this a few years ago by my bank.

buckmoy

Thanks all.

@heartbreak - fair point! Kitchen is 5k from ikea...knocking walls down and roofing etc too....floor..electrics....adds up!

Just to check one point, if I pay off the cards using savings how long will it take to register with the agencies? You mention a few months..I'd assumed it would change the debt on my record pretty immediately (maybe an end of day process) and that the loan application check would then make different calculations based on that revised record? Is that wrong?

Thanks for your help.

somethingcorporate

It wouldn't be an instant process as the banks and the CRAs don't talk in real time. As above I would suggest a couple of months to clear through your files and update accordingly.

Stupid question but this is MSE so why when you are on £100k do you need to borrow and already have a decent chunk of debt which you are looking to replace with even more debt...

buckmoy

Thanks somethingcorporate, why borrow? Just trying to do a house up quickly so I can sell it and realise some equity. Why move from cc debt to pl debt? Lower interest rates and lower on month cash flow - probably a better way and happy to hear it.

PeacefulWaters

buckmoy wrote: »

probably a better way and happy to hear it.

Saving out of a salary that most could only dream of.