Questions in regards to Loan

TheSpace

1) What is a good lender company for a loan? That can offer a good APR.
E.g. Bank of Ireland, TSB, post office, The AA, Bank of Scotland. Admiral, M&S, Tesco, etc

2) I read the reviews that the The AA would offer you a good promotional rate, but then offer you a higher rate after hard CRA search?

3) Does a person have to use a checker? Can a person use lenders own soft search calculator? Some lenders don't seem to appear on checkers/CRA list of results?

4) When applying for a loan, should I say it’s for consolidation purposes? Or should I say it’s for both consolidation and other expenses? But mainly for consolidation? 

5) Can loan applications be rejected if lenders knew you had an existing debt? 

6) Would specifying consolidation, be seen as a risk to lenders?

7) When filling in the lenders application form, is it worth negotiating with lenders after the application stage to try and get a lower APR rate?

8) Can having unused vast credit (not in use), be seen as a negative?

9) Does anyone know the algorithm for a lender? What formula do some lenders use to decide if they should give loan to a person? What do lenders look at in the CRA file? Do they use the credit score?

10) Do lenders know how much income a person earns a month by checking CRA? 

MEM62

TheSpace said:

1) What is a good lender company for a loan? That can offer a good APR.
E.g. Bank of Ireland, TSB, post office, The AA, Bank of Scotland. Admiral, M&S, Tesco, etc
It depends. Some lenders will be better suited to your needs and you, in turn, will better fit some lending profiles.
  
2) I read the reviews that the The AA would offer you a good promotional rate, but then offer you a higher rate after hard CRA search?
If you are suggesting that is an AA policy to mislead you your are incorrect.  Many lenders will not offer you their headline rate. This could be because you have a less than perfect credit history or just do fit their target demographic.   

3) Does a person have to use a checker? Can a person use lenders own soft search calculator? Some lenders don't seem to appear on checkers/CRA list of results?
No, yes and they do not have to be.  

4) When applying for a loan, should I say it’s for consolidation purposes? Or should I say it’s for both consolidation and other expenses? But mainly for consolidation? 
You need to be honest about the purpose for which you are borrowing the money.  

5) Can loan applications be rejected if lenders knew you had an existing debt? 
Yes.  

6) Would specifying consolidation, be seen as a risk to lenders?
All lending is a risk and debt consolidation is high risk.  Most borrowers to not learn the lesson that it is their behaviour that put them in the position of considering debt consolidation in the fist place.  History therefore repeats itself only with a bigger hole dug second time around.  You cannot borrow your way out of debt.      

7) When filling in the lenders application form, is it worth negotiating with lenders after the application stage to try and get a lower APR rate?

Negotiate all you like.  The outcome will not change.  

8) Can having unused vast credit (not in use), be seen as a negative?

Yes.

9) Does anyone know the algorithm for a lender? What formula do some lenders use to decide if they should give loan to a person? What do lenders look at in the CRA file? Do they use the credit score?

No - otherwise people would play the system.  

10) Do lenders know how much income a person earns a month by checking CRA? 

Income is not reported to CRA's.  Lying about your income on a application is not recommended.

There you go  :-)

[Deleted User]

TheSpace said:

1) What is a good lender company for a loan? That can offer a good APR.
E.g. Bank of Ireland, TSB, post office, The AA, Bank of Scotland. Admiral, M&S, Tesco, etc

2) I read the reviews that the The AA would offer you a good promotional rate, but then offer you a higher rate after hard CRA search?

3) Does a person have to use a checker? Can a person use lenders own soft search calculator? Some lenders don't seem to appear on checkers/CRA list of results?

4) When applying for a loan, should I say it’s for consolidation purposes? Or should I say it’s for both consolidation and other expenses? But mainly for consolidation? 

5) Can loan applications be rejected if lenders knew you had an existing debt? 

6) Would specifying consolidation, be seen as a risk to lenders?

7) When filling in the lenders application form, is it worth negotiating with lenders after the application stage to try and get a lower APR rate?

8) Can having unused vast credit (not in use), be seen as a negative?

9) Does anyone know the algorithm for a lender? What formula do some lenders use to decide if they should give loan to a person? What do lenders look at in the CRA file? Do they use the credit score?

10) Do lenders know how much income a person earns a month by checking CRA? 

1) All the lenders you've listed offer decent representative APR rates.  A representative rate being the rate they have to offer 51% of successful applicants. Which segways nicely into the next question...

2) If you are not one of the successful applicants offered the representative rate then you might be one of the 49% offered a higher rate, the rest are straight up declined.  This is the same for AA as it is for any other lender.

3) No you don't have to use an eligibility checker, you can go straight to applying

4) You should select the main reason for wanting the loan.

5) Yes, that is possible

6) Quite possibly but selecting another reason whilst you have outstanding debts elsewhere might not lead to a better outcome.

7) No.  Take it or leave it.

8) It can, depending on the lender and how they calculate risk profiles.

9) A small handful of people know the algorithm for a lender.  

10) Income is not reported to the CRA so lenders may ask for proof of income as part of the application.

DCFC79

TheSpace said:

1) What is a good lender company for a loan? That can offer a good APR.
E.g. Bank of Ireland, TSB, post office, The AA, Bank of Scotland. Admiral, M&S, Tesco, etc

2) I read the reviews that the The AA would offer you a good promotional rate, but then offer you a higher rate after hard CRA search?
That could be right, any lender can do it if they choose.

4) When applying for a loan, should I say it’s for consolidation purposes? Or should I say it’s for both consolidation and other expenses? But mainly for consolidation? 

You be honest is my advice.
5) Can loan applications be rejected if lenders knew you had an existing debt? 
Yes of course, you have too much debt then in the lenders eyes its a risk, the risk being you default and end up paying less than you borrowed.
6) Would specifying consolidation, be seen as a risk to lenders?

A risk yes but if you get accepted it will depend on other factors

7) When filling in the lenders application form, is it worth negotiating with lenders after the application stage to try and get a lower APR rate?

Negotiate with them, how will you persuade the customer service rep you are good for a loan at a lower rate ?

A customer service rep will not have the power to lower the rate on your say so.

9) Does anyone know the algorithm for a lender? What formula do some lenders use to decide if they should give loan to a person? What do lenders look at in the CRA file? Do they use the credit score?

No one knows of the algorithm nor the formula, just think about it for 1 second, if the formula was known then everyone would make sure they would get the lower rate.

They certainly use your credit history not the score, only you can see your score,

My thoughts in bold.

Sncjw

If your getting a consolidation loan it's effectively doubling your debt. You will be assessed on paying your current debt plus the amount you askes for. Theres no garuntee you will use the money to pay off the debts. Plus it makes the debt go on for longer or at a higher cost per month.

Get yourself on debt free wannabe board and post a statement of affairs to see what people can do to help the debt

TheSpace

Thank you all for the replies, this was very appreciated.  I will check out the debt free wannabe board.  I had a few additional questions if you all did not mind answering please.

11) What is the debt free wannabe board? Is that a forum where people would share their stories and success on becoming debt free?  I notice that moneysavingexpert has a section/forum, which I will have a further look.

12) Why can’t lenders give low APR rates to people in debt e.g. 3%, instead lenders give higher APR rates e.g. 18% or 22%.  Seems a bit unfair.  A person in debt, might want to pay more capital a month, but instead would be paying more interest because of the high APR rate.

13) Are there any lenders that would give a low APR rate and pay the person debt directly? This way the lender knows their money is being used for consolidation purposes.

14.1) When lenders look at CRA files, do they look at your current debt versus how much a person is paying off per month?

14.2) Will lenders obtain some sort of indication as to when the person in debt would most likely finish paying their existing debt? Based on the pay per month versus existing debt.

14.3) Will paying the minimum debt per month been seen as a negative to lenders?

15.1) When filling in a loan applications, would having another form of income be taken as positive?

15.2) On the application form, can Savings/Dividends/Investments income such as premium bonds be seen as a positive?

15.3) I have premium bonds can this be classed as savings/income? I do win occasionally.

16.1) In regards to Experian, TransUnion, Equifax.  Do CRA reports exist for every person in the UK? Or are CRA reports first created when a person registers with a CRA? Or are CRA files already there, and all we are doing is obtaining access to our own CRA data?

16.2) By registering with a CRA are we giving them the missing pieces to our CRA data such as email address, mobile and other information that they might not have?

17) These CRA’s have a lot of Terms & Conditions, privacy policies.  By registering with these CRA’s, should I be concerned that I may have given my consent to them to share/sell my data to others? I notice that Experian are offering a boost to the credit score, but in return they would need access to your bank account to view your transactions, seems a bit intrusive.

[Deleted User]

11) Yes
12) Because customers already in debt are much higher risk, therefore more likely to default, hence need to pay higher rates. It would be unfair to low risk customers if they had to pay more to cover the higher risk.
13) There may be some, but none I could name off the top of my head.  None will give you a low rate for consolidation.
14.1) Yes, amongst many other things
14.2) Lenders will look at your paydown rate
14.3) Yes. It tells them that you have no spare income at all to throw at your debt
15.1) Any income should be put down and will be taken into account
15.2)  Savings are not taken into account.  Only income.
15.3) No
16.1) CRA files are populated as lenders add to them. They exist whether you check them or not.
16.2) Occasionally
17) Your files are shared with lenders. The whole score boost nonsense should be ignored. There's no benefit to you to give them access to your bank account.

DCFC79

Getting a loan for consolidation is rarely a good thing and it could take you down a rocky road.

2 options here OP, you either cut your spending or increase your income eg a second job, which one is an option to you.

Maybe a read of this thread might help.

https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise#latest

foxy-stoat

You are better off using your money in Premium Bonds to clear high interest debt and rebuild your savings once your in a better financial position.  Taking out a consolidation loan while you are sitting on PB's seems a very bad idea.