Applying for more than one loan

SMT1985

My partner and I have spent the last 6 months improving our credit score in order to apply for a loan.

My Equifax score was up to excellent and her Experian score was up to excellent. We applied for quite a large amount through Sainsburys as a joint application as this showed as high chance of acceptance for both of us.

We were accepted for the loan but the rate offered is 8.1% rather than the possible 2.8% advertised. We were aware this could happen but it’s still obviously a little disappointing.

I’m now wondering if one of us brought the other down and whether it’s worth us applying for a different loan individually to see if we can get a better rate?

I appreciate this will negatively affect our credit score but, since this is the only loan we intend to apply for and therefore we don’t need a good credit score for a while and can rebuild it again, is there any harm in trying?

Thanks
Steve

Nebulous2

One more application shouldn't do any harm. Stop at that though, don't keep applying. You could also split the applcations between you. How much is the loan? Best rates are usually between £7500 and £15000.

As I'm sure you are aware 51% of applicants need to be given the headline rate. I firmly believe (with no evidence whatsoever) that the very best candidates self-select and go for the best-buys. So at 2.8% it is difficult to get into that 51% because you are competing with lots of people with extremely good credit history. Move 2-3 names down the table and the same doesn't apply. In monetary terms there is very little between 2.8% interest and say 3.3% but the competition to get it may be decidedly less.

SMT1985

Thanks Nebulous

Good tip regarding going for one of the slightly higher advertised rates for less competition.

We did consider splitting the loan as we are looking to borrow £25,000 so I will have a think about that again.

Thanks
Steve

DCFC79

SMT1985 wrote: »

My partner and I have spent the last 6 months improving our credit score in order to apply for a loan.

My Equifax score was up to excellent and her Experian score was up to excellent. We applied for quite a large amount through Sainsburys as a joint application as this showed as high chance of acceptance for both of us.

We were accepted for the loan but the rate offered is 8.1% rather than the possible 2.8% advertised. We were aware this could happen but it’s still obviously a little disappointing.

I’m now wondering if one of us brought the other down and whether it’s worth us applying for a different loan individually to see if we can get a better rate?

I appreciate this will negatively affect our credit score but, since this is the only loan we intend to apply for and therefore we don’t need a good credit score for a while and can rebuild it again, is there any harm in trying?

Thanks
Steve

Your scores are only seen by yourself, lenders see the history.

Martin covered it in his itv show a month or 2 ago.

Geht_fit

My husband and I needed to borrow a substantial amount this time last year. We decided to apply separately to increase the borrowed amount. His credit rating was excellent and he borrowed £25000 over 7 years from Nationwide on a price match deal - I think it beat another loan by 0.5%. My credit rating is average to good and I borrowed £15000 over 5 years from Zopa at its advertised rate of 3.something%. Both offered us advertised rates. First Direct and Sainsburys offered much higher than advertised. Hope this helps! :beer:

Geht_fit

Sorry - I meant to say that we made a couple of loan applications each. We applied for the cheapest first, but weren't offered competitive rates. My husband pursued the price match route, but I think I did the MSE Credit Club loan eligibility checker and went with Zopa as it had the highest match and was still a good rate. We also looked at the interest that would be paid over the life of the loan as a guide to whether we felt it was good value, even if not the cheapest loan available. We were renovating and decided that paying a bit more to get work done earlier was worth it.

SMT1985

Thanks! That is helpful to know

I have now applied individually with the post office and been approved at 6.9% which, although isnt great, is still better than what Sainsburys offered.

My partner has applied through Tesco but we have to wait for their offer to come through.

I think we will settle for the best of the two rather than trying any more and pay the loan off quickly as tempting as it may be to try some others. Each of the ones we have tried have had the highest likely acceptance % on MSE credit so it is probably unlikely we will get better offers unfortunately so not worth the risk trying more.