Consolidation Loan

saint12

Hi, I have just applied to Sainsbury's for a 7.5k loan at 3.7% interest to pay off a 6.5k credit card and my overdraft. However, those cheeky chappies have offered me the loan at 12.5%, so I have cancelled it. I understand that this application could have affected my credit rating and I am loathe to make another application in case the same thing happens. Does anyone have any suggestions as to what I can do next? I'm paying £80 pm interest on the credit card and I assume I have a good credit rating.

Candyapple

Assume? Obtain copies of your credit file from all 3 agencies and check. What is on there - any late payments etc?

Are you on the electoral roll?

What is your debt to credit ratio?

12.5% whilst not the headline is not as bad as some others have reported such as 17-19%+. Bear in mind the 3.7% headline rate is only given to 51% of successful applicants.

I read on here someone else suggested trying Tesco for a loan. However you could try the MSE soft search tool to see if you fare any better with another company, one search will not impact your file greatly.

Apples2

Living in an overdraft and having significant credit card debt is hardly likely to attract the headline rates.

How does 12.5% compare to what you are paying for your credit card and overdraft?

DCFC79

Your credit rating could be 999 but it still wont be of any use.

The cheeky chappies are being cautious as they have no control over what you do with the loan, you could use it for something else and be in a position to not pay it back.

bargainbetty

You could consider applying for a 0% or low life of balance credit card, transferring the debt over and paying it down that way. Just remember to close the old card account down, as the risk is that you use it again. I certainly did. Getting your budget in order and throwing every spare penny at it will give you a huge sense of achievement!

It is worth noting that living in your overdraft isn't a good sign to them that you are managing your money well. That may be why they do not consider you an ideal candidate for the best offerings.

Foxy-Stoat_3

Interest rates for debt consolidation always attract more interest.

If they actually offered you the rate you should work out the numbers and see if you are any better off.

How much debt are you in and £80 interest a month may not be too bad.

CLAPTON

if you're paying £80 pm on 6,500 CC then you are paying 80/6500= 0.012 per month or about 15% APR
how much are you paying on the OD and how much is it?

one application for credit should do your credit worthiness much harm but whether some-one else will offer a better rate depends upon your credit files and your income

saint12

Thanks for the advice everyone. Having never been refused credit or been late with a payment I had assumed (that word again) that I would waltz in and automatically be given the advertised rate as usual. Lesson learned........

Foxy-Stoat_3

Assume does make an A S S out of U and ME.