Offered rubbish interest rate with Sainsbury's - Advice?

uvarvu

I checked on here and the site said I was 95% likely to get a 20K loan from Sainsbury's at 2.8% over 7 years. I applied and received the paperwork through the other day but the offer is 4.2%. Is there anything I can do about this? Can I call Sainsbury's and ask why the rate is so high and ask them to reduce it? I don't need the loan urgently (yet) but something will need to be sorted by mid February, possibly early March 2019 at the latest.

I signed up the credit club and my score with Experian is supposedly 999 out of 999. My outstanding debt on cards is this:

TotalCredit Limit £22,900.00
Balance £6,417.00
Available Credit £16,483.00
Percentage Used 28%

6K of that is 0% and is on course to be paid off before the interest kicks in. The rest I pay off in full each month.

I also have an existing car loan but the 20k loan will replace it. All payment history has been fine, no defaults or anything else. I've only applied for this loan too.

Thoughts?

[Deleted User]

You're carrying a lot of debt and a lender has no way of knowing you're looking to consolidate, so you're higher risk. As you"ve seen, your Experian 999 score isn't real, so ignore that.

4.2% is a very good rate under the circumstances. You could try one further application, but I would leave it there.

System

So add the outstanding amount on the car loan to your credit card and what percentage of your annual income does that amount to? That is most likely the reason you're being offered a higher rate because the £20k would be seen as additional borrowing to that even if you intend clearing the existing finance with it because of the number of people who take out consolidation loans and it ends up adding to their debt as they don't clear what they had or build it back up again.

uvarvu

Adding the car debt to the rest of the cards works out to around 16% of my annual income.

MABLE

By what you say the recent £20k loan is to repay an existing debt. This then is purely a consolidation loan and these loans always attract a higher apr.

Based on what you are trying to achieve I would let the matter rest. To reduce the amount of interest just overpay when the situation permits.

iolanthe07

4.2% APR is a competitive rate. You might struggle to get better than that.

Farmer_Johnson

If you are earning £200,000 a year and are carrying that much credit card debt then just cutting back for a few months should let you clear it.

uvarvu

Haha I wish!

I only want to consolidate the existing car loan and not the cards as their interest free periods are okay and they'll be paid off in time.

The existing car loan is 5K. If I borrow 20K I can consolidate that and use the remaining 15K to purchase a replacement car for my wife as hers is on its last legs. What I was hoping was that there would be little to no increase in my monthly outgoings but the 4.2 rate changes that. Do you think I can get a better rate if I pay a load off the cards ASAP and then try for another loan in the new year?

Mobeer

Taking your numbers in this thread:

6,417 existing credit card debt
20,000 car loan replaces existing loan of 5,000
Total loans will be 16% of your annual income

So your annual income:
(6417+20000) * (100/16) = £165,106

or if the credit card company does not know one loan replaces the other:
(6417+20000+5000) * (100/16) = £196,356

So do what Farmer Johnson said and cut back 2-3 months.

foxy-stoat

uvarvu wrote: »

Haha I wish!

I only want to consolidate the existing car loan and not the cards as their interest free periods are okay and they'll be paid off in time.

The existing car loan is 5K. If I borrow 20K I can consolidate that and use the remaining 15K to purchase a replacement car for my wife as hers is on its last legs. What I was hoping was that there would be little to no increase in my monthly outgoings but the 4.2 rate changes that. Do you think I can get a better rate if I pay a load off the cards ASAP and then try for another loan in the new year?

You dont need to spend £15K on a car - but the rate you have been offered is good enough.

ratrace

foxy-stoat wrote: »

You dont need to spend £15K on a car - but the rate you have been offered is good enough.

I find it bizzare i really do, car is on last legs so let go spend 15k which we dont have on a car and then complian about that we have been offerd 2 - 3% more than we thought

how about lets buy a cheaper car and put the money that we was going to put towards payments in a savings account then after x months we have enough money to buy a 15k car in cash oh and guess what all for 0% interest as we have paid cash

its a no brainer yes but we dont want to wait we want it today
i rest my case