Accepted for 2 loans, need help deciding which?

PinkyFloydUK1

Changing my car and borrowing 8k.

1st loan Tesco accepted at 3% over 4 years. Documentation is on its way and they only need my signature, no supporting documentation as this loan will top up an existing Tesco loan that has a year left to run.

But then I thought I would prefer the loan over 3 years insteas of 4. Rather than risk Tesco running another search as a change to the application and getting a higher APR, I applied with Santander.

They offered at 6.9% for 3 years.

I am not doing any more hard searches on my credit file so it looks like these are my options.

Choose 4 years, pay less at 3%.

Pay more, but be done with the loan in 3 years at 6.9%.

Which do you think I should go for?

Willing2Learn

Hi PinkFloydUK1 and welcome to the forum

I would choose the loan that costs less ££££££ in interest.

PinkyFloydUK1

Yes I guess that makes most sound financial sense. I suppose I am lucky that I have 2 half decent loan offers. Too scared to apply for a 3rd in case it mucks up my credit file too much.


At the moment am thinking of accepting the 3% 4 year term and if for some reason that falls through (stranger things have happened), then I at least have the 6.9% 3 year loan offer to fall back on.


Does that make sense?

DrEskimo

Take the Tesco loan at 3% over 4-years and just overpay each month to pay it off in 3-years.

It's the APR that is important in determining the cheapest loan, in this case, the Tesco loan will charge more than half the amount in interest if you overpay.

[Deleted User]

Choose four years and overpay to three, subject to overpayment caps.

PinkyFloydUK1

I hear you guys, you are all saying the same thing and I think that makes the most sense.

PinkyFloydUK1

Oh, one last thing. I applied for the tesco loan on tuesday which was accepted same day and documents posted same day also. I applied for the santander one today.


Is there any chance that applying for the santander loan today could affect any kind of last minute decision on the part of Tesco once they receive my signed documents back?

DCFC79

PinkyFloydUK1 wrote: »

Oh, one last thing. I applied for the tesco loan on tuesday which was accepted same day and documents posted same day also. I applied for the santander one today.


Is there any chance that applying for the santander loan today could affect any kind of last minute decision on the part of Tesco once they receive my signed documents back?

Not sure but give Tesco a ring and ask.

PinkyFloydUK1

Kind of hoping Tesco will have no need to do a further credit check and will therefore not even know about the Santander application, but who knows?



I guess they would need my permission in order to do a further check on my credit file anyway so I'll have a heads up beforehand.


It's always a really nervous time dealing with online/postal type loans because they do take time and people have been refused right at the last moment when everything has gone swimmingly right up until that point

[Deleted User]

PinkyFloydUK1 wrote: »

I guess they would need my permission in order to do a further check on my credit file anyway so I'll have a heads up beforehand.

You'll have already given your permission with the original application, so there won't be any heads up.

PinkyFloydUK1

I guess. In the lap of the gods then.