Too high interest rate on loan offered by my bank

dude44

Hi guys

I had a offer on my acoount for a persoanl loan and I am not house owner so I called my bank and spoke to the staff who said they given me up to £10000 at 26.5% APR and they if you find a cheaper one they can match it.

My call credit score is 502/999 so I dont know how came up with this high interest rate, would like to know if I can get something cheaper.

Help please can add more detail if need be.

Thanks

Dude 44

Caz3121

credit scores mean nothing (and for completeness if you want to see your "magic number" you should get from all 3 credit reference agencies) Each lender will have their own scoring system that will be based on your current debt and income together with the 6 year history of how you manage your debt
Your bank seems to think you are a higher risk than others (but not as bad as some who would get a straight decline)
what is your current debt and salary? have you ever had any defaults, CCJs or missed payments?

dude44

Hi Caz3121

I missed some payments in 2009 and 2012, no CCjs and no defaults I recently got a car loan, have 2 credit cards for £2500 each one charges too much interest and the other one is fine, which I want compliment with the loan so that I will have one single payment. I earn in excess of £2000 per month so I would be comforable paying upto £300 a month for 5 years to settle everthing.

I have not missed any payment on my cards but the amount remains the same.

What is my best option to sort this out.

Thanks

Dude44

[Deleted User]

With a patchy credit history, you're also asking for a lot of credit on your income - a total of 15k plus a car loan. They have no guarantee you will pay off the existing cards.

I would look at reducing your existing debt. Try the DFW board for help.

PeacefulWaters

dude44 wrote: »

I missed some payments in 2009 and 2012

This would make me think "high risk - doesn't pay when due".

no CCjs and no defaults

Positive.

I recently got a car loan

This would make me think that I should establish your ability to pay this for a longer period before extending further credit to you.

have 2 credit cards for £2500 each one charges too much interest and the other one is fine, which I want compliment with the loan so that I will have one single payment.

What rates are you paying?

I earn in excess of £2000 per month

Why do you keep needing to borrow then?

so I would be comforable paying upto £300 a month for 5 years to settle everthing.

And how much are you paying to the credit cards now? If it was £300 you'd clear them in a couple of years.

I have not missed any payment on my cards but the amount remains the same.

I assume you only pay the minimum payment. If I was a lender I'd interpret this as a sign of financial distress.

What is my best option to sort this out.

Stop taking out loans. Pay £1 plus minimum payment to the cheapest card. Pay as much as possible to the most expensive card. Don't spend any more on the cards.

I'm amazed anybody offered you a loan. Once they did, a high rate was inevitable.

Tryingtomoveout

I'll bet this is LLoyds! Am I right? Their APR's are terrible

andyfromotley

As a starting point why don't you use the loan eligibility checker on here to get a feel for how other lenders view you? If they all offer similar rates or not eligible then it would appear that your bank has it right.

From the circumstances you have described you do not need a loan, certainly not at 29.9%. What you need to do is budget properly and pay off your debt. I reckon that with a bit of effort you could have those debts paid off within a year.

Put an SOA on the debt free wannabe section and you will soon have an answer.

HTH andy

dude44

Hi All

Which one is DFW Board and where can I find it too desperate what to c
Lear my accounts

Thanks Dude44

Caz3121

dude44 wrote: »

Hi All

Which one is DFW Board and where can I find it too desperate what to c
Lear my accounts

Thanks Dude44

here you go http://forums.moneysavingexpert.com/forumdisplay.php?f=76 you will get good advice and support on there. Good luck (it may be painful cutting back but it will be so worth it when you are free from debt and can actually save for things)