Loan rate rip-off?

lworthy

Hi,
Just had to comment on the loan rates being advertised on here and numerous other sites, and what is actually offered. I recently applied for a Santander (via Cahoot) loan of £12,000 over 4 years at an advertised rate of 2.8%. I got immediate confirmation that I had been successful, but at 12.9% which would be an extra £2,400 over the £600 interest I would have paid at the advertised rate of 2.8%.

This is a huge difference and makes the loan sound like a major rip off, when I've an excellent credit rating, no mortgage, my income is higher than my outgoings, I've savings, no loands and my card spend is minimal and paid off every month.

Tried calling Santander for an explanation (who I had a mortgage with for 10 years and never missed a payment), but due to Coronavirus they cut me off after 4 minutes of a recorded message - hopeless!

[Deleted User]

 The rate you are given is based on your credit history. You say your rating is excellent but it looks like you have minimal credit right now so nothing for them to asses your worthiness for a lower rate. 

DCFC79

lworthy said:

Hi,
Just had to comment on the loan rates being advertised on here and numerous other sites, and what is actually offered. I recently applied for a Santander (via Cahoot) loan of £12,000 over 4 years at an advertised rate of 2.8%. I got immediate confirmation that I had been successful, but at 12.9% which would be an extra £2,400 over the £600 interest I would have paid at the advertised rate of 2.8%.

This is a huge difference and makes the loan sound like a major rip off, when I've an excellent credit rating, no mortgage, my income is higher than my outgoings, I've savings, no loands and my card spend is minimal and paid off every month.

Tried calling Santander for an explanation (who I had a mortgage with for 10 years and never missed a payment), but due to Coronavirus they cut me off after 4 minutes of a recorded message - hopeless!

Not a rip off at all.
The 2.8% is just advertised rate, no one is guaranteed to get that rate.
Dont be so down, its only a loan.
Apply at another lender and see what rate you get.

[Deleted User]

lworthy said:

Hi,
Just had to comment on the loan rates being advertised on here and numerous other sites, and what is actually offered. I recently applied for a Santander (via Cahoot) loan of £12,000 over 4 years at an advertised rate of 2.8%. I got immediate confirmation that I had been successful, but at 12.9% which would be an extra £2,400 over the £600 interest I would have paid at the advertised rate of 2.8%.

This is a huge difference and makes the loan sound like a major rip off, when I've an excellent credit rating, no mortgage, my income is higher than my outgoings, I've savings, no loands and my card spend is minimal and paid off every month.

Tried calling Santander for an explanation (who I had a mortgage with for 10 years and never missed a payment), but due to Coronavirus they cut me off after 4 minutes of a recorded message - hopeless!

You really didn't need to comment as there is already a plethora of threads on the forum from people who don't understand the term "representative APR".  

https://www.moneysavingexpert.com/loans/personal-loans-apr-examples/

You could always apply for a loan with whichever company has given you an excellent credit rating but I bet they don't actually lend money. 

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

No one you can speak with at Santander is going to be able to tell you why their credit scoring algorithms came up with a rate of 12.9% APR for you so you'd just be wasting your time calling up. 

MallyGirl

DCFC79 said:

Not a rip off at all.
The 2.8% is just advertised rate, no one is guaranteed to get that rate.
Dont be so down, its only a loan.
Apply at another lender and see what rate you get.

51% of people will get that rate - just not the OP