Tricking the banks

BS1991

My question mainly relates to mortgages but I also wonder if it has any impact on normal personal loans from banks.

I have never qualified for the low interest headline rates that the banks advertised for personal loans despite having zero debt, regular income (£40k+ after tax), no bad credit marks etc. I don't have many 'good' credit marks either though, because I am against credit cards and have never had a loan because I don't want to pay the rip-off rates they eventually quote me.

I was told by a bank once that the reason I wasn't qualifying for the lowest interest headline rates was because money is not regularly deposited into my bank account (I am self employed and the bank I wanted the loan from didn't see my money because it went into another one of my bank accounts).

Is it possible to trick the banks by basically doing this once a month for several years:

• Start with £10,000 in Bank Account 1
• Move the £10,000 to Bank Account 2
• Move the £10,000 to Bank Account 3
• Move the £10,000 to Bank Account 4
• Move the £10,000 back to Bank Account 1

The result will be I have 4 bank accounts that have had £120,000 paid into each year.

Is this a waste of time or would it actually help me to unlock better mortgage/loan rates?

mortgageFTB

Shifting money around in a loop won't help you secure a mortgage interest rate you want.

Having the correct LTV for that product and good credit history will.

BS1991

Ok so what about personal loans?

I can never understand why I don't get the headline rate they offer - does anyone? I mean, I earn more than enough to cover repayments, have no bad credit etc. Last time I tried to get a loan was from NatWest but I had stopped using them for storing my cash due to bad service. So I had not paid any money in for a while, yet could prove my earnings for the last 3 years plus.

So surely no money being paid into the account would be a factor in why I would not get the best rates.

Even if I paid my £40k earnings in each year, they would still be withdrawn and spent so actually keeping the money in the account should not be the issue as most people spend/invest the money they earn outside of their bank.

BS1991

To clarify - I am being approved for personal loans, it's just that I never accept them because they do not offer reasonable rates.

As I may get a mortgage in a few years (50% deposit from me, at least) I was just wondering if this money loop would improve anything for me in terms of having money regularly going in to 4 different banks/mortgage providers - giving me a good account history with 4 alternative lenders).

I'm going to do it anyway - would take 5 minutes once a month and won't cost me anything, so what's the harm in it!

AnotherJoe

BS1991 wrote: »

Ok so what about personal loans?

I can never understand why I don't get the headline rate they offer - does anyone? I mean, I earn more than enough to cover repayments, have no bad credit etc..

But you don't have good credit either. A factor in that would be, due to your policy of being "against" credit cards you have no record of paying back debts.

How about, instead of your loop the loop of ten thousand pounds every month for years, you do the same with a credit card? For example,

Buy goods with credit card.
Pay back the full amount owed at the end of each month, thus incurring no interest charges at all, getting free consumer protection, and possibly acquiring free cash back or airline points.
Repeat for several months, perhaps a year.

Apply for loan (which you are seemingly desperate for)

On a related matter, why are you "against" credit cards, but "for" a loan / mortgage, when a credit card can be a loan at zero percent that gives free additional benefits ???

BS1991

AnotherJoe wrote: »

But you don't have good credit either. A factor in that would be, due to your policy of being "against" credit cards you have no record of paying back debts.

How about, instead of your loop the loop of ten thousand pounds every month for years, you do the same with a credit card? For example,

Buy goods with credit card.
Pay back the full amount owed at the end of each month, thus incurring no interest charges at all, getting free consumer protection, and possibly acquiring free cash back or airline points.
Repeat for several months, perhaps a year.

Apply for loan (which you are seemingly desperate for)

On a related matter, why are you "against" credit cards, but "for" a loan / mortgage, when a credit card can be a loan at zero percent that gives free additional benefits ???

I'm not desperate for anything. I am just curious as to how to get the headline interest rates they advertised, to lure you in.

As mentioned in my opening message, the bank said that I am not paying anything in to my account regularly and they alluded to that being the reason for not getting the lowest rate on the loan.

I will look into credit cards, although, I have had mobile contracts, car finance etc before, but still I cannot unlock the top personal loan rates.

My query here is not out of desperation, rather curiosity and forward planning.

AnotherJoe

Forward planning would be, having a record of consistently paying back credit.
The two most common mechanisms for this would be, credit cards and mobile phone contracts. Perhaps your car finance and mobile phone record were too old?

As for Nat West, when you have no record of money entering your account, and no credit history with them why would you expect them to give you the best rate?

Forget the "I don't have a bad credit record" and focus on fixing " I dont have a good credit record".

If they gave you their best rate where do they have left to go with someone who pays lots of money in every month and had a consistent record of paying back debt on time ?

You expectations were unrealistic.

BS1991

AnotherJoe wrote: »

As for Nat West, when you have no record of money entering your account, and no credit history with them why would you expect them to give you the best rate?

If they gave you their best rate where do they have left to go with someone who pays lots of money in every month and had a consistent record of paying back debt on time ?

Hence the suggestion in my original message here....

amnblog

They only have to offer the 'headline rate' to one borrower for the rate to be legally advertised.

Welcome to the 21st Century where Carlsberg is 'probably' the Best lager in the World.

waveneygnome

The other major factor on these headline grabbing loan rates, is that the rate you get offered is dependent upon the size of the loan:

Headline - loan rate 'from 4.39%'
But if you read the small print, this is for people who borrow £15k

If you apply for say £4k.......the rate you get offered maybe 7.6%.

In the past, I have taken out larger loans than needed (to get the cheapest loan rate), then immediately repay a large chunk to get back to the actual loan I wanted. You need to really check that the lender will allow overpayments though.

Pixie5740

Loans are usually advertised with a Representative APR. A Representative APR is an advertised APR that a minimum percentage of customers (who are accepted) will pay. Under current EU rules this minimum percentage is 51%. So OP, you are in the other 49% of successful applicants.