Loan applications/rates

snudge27

After a bit of advice...

I've got a better-than-average credit rating, and applied for a loan with Santander (advertised with an APR of around 3%) to consolidate and pay off some debts.

They replied to me this morning advising me that they'd accepted me for the loan, but at a rate of around 23%!

Obviously I'm disinclined to take the loan as it doesn't really reduce my payments, and is at a terrible rate of interest.

On the other hand I worry that the more applications I make to try and find a better rate, the worse my credit rating is going to be owing to the repeated searches on my file.

Any advice?

Does anyone know who the best lenders are for offering rates close to their advertised rates?

Thanks!

jonesMUFCforever

To get the best rates your credit reports needs to be squeaky clean.
They have to offer the best rates to only 51% of applicants.

HappyMJ

snudge27 wrote: »

After a bit of advice...

I've got a better-than-average credit rating, and applied for a loan with Santander (advertised with an APR of around 3%) to consolidate and pay off some debts.

They replied to me this morning advising me that they'd accepted me for the loan, but at a rate of around 23%!

Obviously I'm disinclined to take the loan as it doesn't really reduce my payments, and is at a terrible rate of interest.

On the other hand I worry that the more applications I make to try and find a better rate, the worse my credit rating is going to be owing to the repeated searches on my file.

Any advice?

Does anyone know who the best lenders are for offering rates close to their advertised rates?

Thanks!

Wait a month before applying for another loan.

Sainsbury's has one of the lowest rates out there. You need to have almost perfect credit to get a loan approved with them. Better than average won't cut it.

snudge27

HappyMJ wrote: »

Wait a month before applying for another loan.

Sainsbury's has one of the lowest rates out there. You need to have almost perfect credit to get a loan approved with them. Better than average won't cut it.

Thanks for the advice!

Are there any providers who are a little more relaxed around applicants with fair-to-middling credit? Or am I going to struggle to get anything below 20% at the moment?

[Deleted User]

How much do you owe and what's your income?

snudge27

I'm earning about £25k p/a, and looking to borrow about £6,500 to consolidate some credit card debt and a current loan (£4k & £2.5k). Currently paying about £65 a month on the credit card, and £170 a month on the loan.

burlington6

snudge27 wrote: »

I'm earning about £25k p/a, and looking to borrow about £6,500 to consolidate some credit card debt and a current loan (£4k & £2.5k). Currently paying about £65 a month on the credit card, and £170 a month on the loan.

Probably won't happen then.

You want to borrow over half of you income.

Thrugelmir

snudge27 wrote: »

I've got a better-than-average credit rating, and applied for a loan with Santander (advertised with an APR of around 3%) to consolidate and pay off some debts.

What matters to the lenders is the amount you are in debt not your profile. Given the amount you owe, the potential default is sizable . This prices the offers you'll receive. Not the fact that you make payments on time.

foxy-stoat

You could try your own bank or clydesdale, play around with the amount you want to borrow, there is a jump down in interest rates at £7000-£7500.

Only make one more application then leave it a few months if you cannot get a better deal and overpay on your existing debt as much as you can.

Good lucks

syco291

Try Post Office loans - I just got 10k from them at about 4.8% (cant remember exactly). I did the MSE Loan eligibility checker before applying and they came out at 90% chance of approval so applied and got accepted on the spot.

Just for reference, my debt at the time of applying was circa 19k and I earn 23k so the debt to earnings ratio isnt always applied in the way discussed above. I've had a mortgage at the same property for 8 years and not had any credit searches for the last 12 months though, so not sure if that made a difference.

downhillfast

HappyMJ wrote: »

Sainsbury's has one of the lowest rates out there. You need to have almost perfect credit to get a loan approved with them. Better than average won't cut it.

I disagree... I was approved for a £9k loan at 6% with them 3 years ago, only a few months after bankruptcy disappeared off my credit report... with the only history on my file being a couple of years of running a £500 limit Aqua credit card and a £1k limit Halifax Clarity card! I wouldn't and still don't describe my credit report as perfect but I have little problem getting the products I require now. Just goes to show how little the score matters really and how it's more about how much you earn/owe!