New application or accept higher rate?

Sncjw

Do you have any debts at all. Someone on £60k should be able to save money to put a side to pay for the car. Surely you knew this was coming ups

b_real

Sncjw wrote: »

Do you have any debts at all. Someone on £60k should be able to save money to put a side to pay for the car. Surely you knew this was coming ups

Yep I've got a few credit cards, I'm using about 20% of my total credit limit (all on low interest cards, and I'm working on bringing them all down). My understanding is that this is a healthy amount of debt to have (in credit file terms).

I did know this is coming up, and had planned on taking out a loan to pay it off. As mentioned, I could use my savings to pay it off but I don't want to and I don't think that's a good use of finances. I might be on £60k but I live on my own in the SE and its not a huge salary compared to the cost of living (rent is a killer). I'm moving into a flat share soon to save cash, but cash/affordability is not the problem here. The problem is getting whacked by high interest rates without any real information about why. I can afford the high interest rates, but I'm just querying the whole mystery around why I'm getting offered 300% above the advertised representative rate and you don't find that out until after you've applied. Seems backwards.

[Deleted User]

Carrying the debt is another killer in terms of being seen as low risk, with possible exception of it being all at 0%.

Pay it off and demonstrate you're not reliant on credit.

Remember that you can't be told the rate until after you've applied, because it's risk based. It would be backwards to offer a low rate to someone you later found out was high risk.

b_real

Ok so i've just opened an Equifax account as well as my existing Experian. With Equifax I'm rated 'Excellent' at 480 (out of something), and the file is pretty much exactly as Experian. Basically my credit files are in good shape. Don't think i'll bother checking with the 3rd company that do this stuff, whoever they are.

Going to try a new application. Does anyone here know much about the MSE Eligibility Loan Calculator? It gives you the representative APR and your eligibility chances of being accepted or not.

Does the eligibility chance have any bearing on your chances of being accepted in the 51% representative rather than the 49%? I.e. am I better going for an eligibility of 95% for a representative APR of 3.1%, compared to 90% eligibility for 2.9%?

I'm not concerned about whether I'm accepted at all, I'm concerned about whether I'll get a low rate. The list of options is:

AA - 3.1% with 95% eligibility chance
Post Office - 3.2% with 95%
John Lewis - 2.9% with 90%
RBS - 3.4% with 90%
Zopa - 2.9% with 80%

Is there any way to tell from that information which is more likely to offer a low % APR?

[Deleted User]

No.

The acceptance chances doesn't reflect the chances of getting the headline rate.

You're higher risk so don't chase the lowest rate. You may do better with a higher rate headline APR.

b_real

Deleted_User wrote: »

Carrying the debt is another killer in terms of being seen as low risk, with possible exception of it being all at 0%.

Pay it off and demonstrate you're not reliant on credit.

Remember that you can't be told the rate until after you've applied, because it's risk based. It would be backwards to offer a low rate to someone you later found out was high risk.

Yep good point. I've been carrying the debt for ages, paying minimum amounts and shifting it around low interest cards, occasionally letting the low interest periods revert back to high interest. This has been a worry of mine but the only savings I've had that could pay these off I've earmarked for a house deposit (but house prices have been spiralling further and further out of my reach so I've never really been able to find somewhere, but I still want to keep it for ready access/emergency... and why not if the credit card debt I have is all super low interest).

b_real

Deleted_User wrote: »

No.

The acceptance chances doesn't reflect the chances of getting the headline rate.

You're higher risk so don't chase the lowest rate. You may do better with a higher rate headline APR.

I'm guessing my credit cards are putting me in the higher risk category then, which is confusing when the credit agencies are all telling me I'm in good shape!

The RBS offer is because I'm existing current account holder (for like over 15 years), would that help?

Jami74

b_real wrote: »

Yep good point. I've been carrying the debt for ages, paying minimum amounts and shifting it around low interest cards, occasionally letting the low interest periods revert back to high interest. This has been a worry of mine but the only savings I've had that could pay these off I've earmarked for a house deposit (but house prices have been spiralling further and further out of my reach so I've never really been able to find somewhere, but I still want to keep it for ready access/emergency... and why not if the credit card debt I have is all super low interest).

Just pay your credit cards in full every month! The money you save on interest can go towards your savings. Wait a couple of months and then apply for a loan again, maybe through your own bank. Yes, the advertised APR might be higher than some but you'll be more likely the get their best rate (unless you are sitting in overdraft). If you need to pay the £13k before that, pay it out of savings and then when you get your loan replace it.

[Deleted User]

If the credit agencies knew about lending criteria, their opinion might count for something. Until then, ignore them.

Your history with RBS will count for something.

Jami74

Or if your credit rating is good, could you get a 0% money transfer credit card to pay off the car?