One loan 'application only' has had negative affect - is this normal?

tlongdon

Hi there,

I'm sorry I've searched threads but can't find anything specific.

I applied for a car loan recently, and had a good offer from Tesco bank at 2.9%

I decided not to pursue it as I couldn't find a car I liked at the time.

Last week I found a car, so applied again. But this time the APR was 9.4%! Same bank, same details, just one month later.

Is this normal? the dealer is now offering a better rate at 4.5% - despite having a very large credit account with Tesco Bank, and a credit card with them which clears each month, this seems bonkers.

[Deleted User]

Not necessarily normal, but entirely possible.

Criteria change, as does the mix of applications received. You may now be in the riskier 49% of accepted applicants.

[Deleted User]

It could be something to do with the previous application that you then decided not to proceed with.

It's not uncommon and also happens with credit card applications - apply one week, get accepted with a £10k limit, decide to decline, apply at a later date and get accepted with only a £3k limit.

It happens.

tlongdon

Thanks guys. I guess lesson learned - take the money and don't ask questions!

Thrugelmir

Possibly the tranche of available funding at that rate has been fully allocated. Funds are finite.

hunte78

I had this with my First Direct loan, received advertised rate but never pursued it, later the same day I reapplied and got offered a much higher interest rate. I called first direct and the person advised me that the old application was still on the system despite me cancelling during the application process. In my case first direct cleared the old application and when I reapplied I got offered the best rate.

May not work in your case as I am a customer of the bank but you could call and see.

Ben8282

You say you applied for a loan and therefore there would have been a hard search.
It is quite possible that they see this previous recent hard search for a loan application and assume either it was declined or you got the loan and now want another one. Either way, it could well be having a negative effect.