Poor APR offer - worth trying elsewhere?

Alicefward

I applied for a Sainsbury's loan of £7,500 for home renovations. I have been offered 6.3% APR rather than the 2.9% I was hoping for. I was disappointed because my credit score is excellent, I am a home owner full time employed etc.

Since I applied the Sainsbruy's offer has disappeared from the MSE website as well.

Is it worth me not signing the Sainsbury's agreement, and trying elsewhere? Or would that be a mistake? I can see there are good rates at Admiral.

[Deleted User]

It's always worth one more application.

Be aware though your credit score isn't a factor in lending, so you will be assessed purely on lenders' risk criteria.

It may be better to go for a slightly higher headline rate.

Alicefward

Thanks for the reply - I wonder which risk criteria I hit in order to miss out? What kind of things are they?

[Deleted User]

Experience of credit, history of repaying, financial associations, ER, debts, limits, residency, payment levels, income, employment - that sort of thing.

Ebe_Scrooge

Alicefward wrote: »

Thanks for the reply - I wonder which risk criteria I hit in order to miss out? What kind of things are they?

No-one will know - that sort of information is confidential and commercially sensitive, and varies from lender to lender. And it just goes to show - yet again - that your credit score is totally meaningless.

The specific criteria for acceptance will vary from lender to lender, but there are a few things that pretty much all of them will look at. Being on the electoral roll, having a steady income, having a history of regular repayments with no missed or late markers, no CCJs, not already having too much debt in relation to your income (a VERY rough rule of thumb is to have no more than 50% of your income as debt, excluding mortgage, but this is only a rough guideline).

Alicefward

Thanks for the reply. So it wouldn't hurt for me to try another application. I have read some of the other forum threads and seen it might be worth going for one with slightly higher headline APRs.

I worried if I did a second application I'd be less likely to get it.

Ebe_Scrooge

Alicefward wrote: »

I worried if I did a second application I'd be less likely to get it.

A couple of applications are fine. It's when you make loads of applications over a short space of time that it becomes a problem - it then looks to lenders like you're desperate for credit, which doesn't look good to them.

DCFC79

The 6.9% might be the best you can get.

foxy-stoat

Not a bad rate to be honest. Try another application and see what you get.

DrEskimo

What sort of period are you looking at paying it back over?

You could go for 0% credit card that offer longer interest free periods, like the MNBA over 26months?

Obviously just want to be absolutely sure you can pay it off over the free period, as the interest is considerably higher after that...!

MallyGirl

Alicefward wrote: »

I applied for a Sainsbury's loan of £7,500 for home renovations. I have been offered 6.3% APR rather than the 2.9% I was hoping for. I was disappointed because my credit score is excellent, I am a home owner full time employed etc.

Since I applied the Sainsbruy's offer has disappeared from the MSE website as well.

They might just have hit the quota for loans at that rate and it had nothing to do with you, just bad timing