Should I make a 2nd loan application?

NeilB82

Hello all
Looking for some advice from anyone in the know. A few days ago I applied for a £10,000 loan over 7 years from M&S bank at 2.8% to consolidate some credit card debt and reduce monthly DD. My Credit score according to Experian is good. I was approved for the loan but they haven't offered me the advertised rate, they have offered me 8.8% :mad:

I've since been online and used money supermarkets eligibility checker and seen that according to them I'm much more likely to be approved for a loan for the same amount and terms from Yorkshire Bank at 2.8%. (Wish I'd checked this first!!) My question is should I ignore the offer from M&S and apply for Yorkshire Bank? Will two applications close together affect my credit score even if I reject the first offer? Am I stuck with M&S and their rubbish rate now? How much time should I leave before applying for Yorkshire Bank?

Any advice is welcome. Thanks.

System

You're only stuck with the rubbish rate if you think that the credit scores that no lender uses from the credit agencies carry any weight.

As an aside, given the amount of people who get a consolidation loan only to re-spend on the credit cards they've cleared and dig a bigger hole then you tend to find the rate offered is not the best one they advertise due to the debt:income ratio as they count your current debt as continuing with the new credit added to that.

NeilB82

thanks for your reply, I'm not planning on doing that I'm going to cancel the two cards once they are clear.

So, from your first comment, no lender uses credit scores to make a decision on whether to lend or at what rate? Does that mean it doesn't matter how many applications I do and I should shop around for a better rate? Surely that will have a negative impact. What are credit scores used for then if not in loan applications?

Thanks again

[Deleted User]

Multiple applications can make you look desperate for credit, which may concern some lenders.

Credit scores are used purely to encourage more susceptible customers to pay for monitoring and credit score improvement services.

sccooter

your looking at head line rates. they are just carrots. marketting! only a few will get offered the 2.8%

DCFC79

NeilB82 wrote: »

thanks for your reply, I'm not planning on doing that I'm going to cancel the two cards once they are clear.

So, from your first comment, no lender uses credit scores to make a decision on whether to lend or at what rate? Does that mean it doesn't matter how many applications I do and I should shop around for a better rate? Surely that will have a negative impact. What are credit scores used for then if not in loan applications?

Thanks again

Theres 2 different things,

The credit score/rating is the figure the agencies rate your credit file but it stops there since no lender can see that figure.

The credit history lists everything financial eg loans taken out, credit cards, baank accounts you have but your history only covers the past 6 years.