Loan accepted but at much higher rate

MattEng

Hi all.
This morning I applied for a £10k loan to purchase a new car. I've got a decent credit rating and after looking at the providers advertised on MSE. I applied for a loan with Santander for £10k over 3 years at the advertised Apr of 2.8%.
I have just had an email to say its been accepted but at a rate of 11.9%. I'm not happy to proceed at this rate so what are my options?
Can I negotiate with the bank?
Should I cancel and try elsewhere?
I have the savings to cover the car cost but I feel more comftable paying via a loan, especially when the interest over 3 years would only be £400.
I'm also a little annoyed as I was unaware the loan could be accepted but at a higher rate. (I know it would probably be in the extra small print but who has time to read all that)

Any advice?

Cheers Matt

antrobus

It's a representative rate. 50% of applicants will be offered that rate. You're in the other 50%.

You can try negotiating, but it would be a waste of time. Try elsewhere.

iainscomputer

Hi, I had the same thing happen with Hitachi Credit about 4 years ago, the rate wasn't as high as offered to you, but I didn't want to proceed.
But before I knew it, the money was in my account. I'm not happy that they don't check the terms are acceptable before the money is transferred.
I just paid it all back immediately, but it was a bit of hassle & I could easily have been liable for some substantial interest.

DCFC79

Is Santander your own bank ?
If not give your own bank a try.

Unfortunately your credit rating is of no use to lenders as they see your history.
Give 1 more application a try.

Do you have any debts ?

MattEng

The only debt I have is my Mortgage.
I've never missed a payment on anything and have had decent savings since a year or 2 after buying my house.
I can't see a reason why I'd not get a decent rate.

Nebulous2

They need to offer 51% of successful applicants the representative rate.

That means the people who apply for tabletopping loans are competing in a very select group with lots of others with very good history.

I'm convinced if you move down a few places in the best buy tables you'll have a much better chance of success.

You can't make too many applications though, so keeping trying doesn't work. One more would be sufficient for 6 months or so.

BakingC

Lenders aren't always looking for people with excellent records. They are also looking for people to make more money off in the future. You say you already have a mortgage perhaps their ideal customer for loans that size is somebody they can cross sell to and sell them a mortgage in the future.

Also element of competition for the very top rates if you tried at 3-3.2% maybe you would have better luck

iolanthe07

People seem to take it personally when they don't get offered the headline rate, but it may just be that the lender has filled their quota of 51% for that month. Why would they offer cheaper loans when they don't have to?