Loan Rates

Mr_Eko

Hi,

I have a perfect credit score and income above £60k, no defaults, no missed payments, (currently) no unsecured debt, electoral roll registered etc etc. Plenty of credit history, available credit etc.

And yet nobody can offer me a rate below 19% on a £25k loan. That’s practically a payday rate isn’t it surely? It’s £20k interest over 7 years.... madness.

Have these guys got to tell me why they it’s so high? Or only if they reject me? Because I’ve got my credit report and there is nothing on there. I mean what criteria do the 51% who are offered the representative rate have?!?

I’m literally at a loss.... there are no factors to improve, so what just never get a loan?

Just after some advice. Thank you

2021BJ

19% is nothing like payday rates.

There could be any number of reasons for offering you a higher interest rate.  Without knowing a lender's criteria and seeing your file it's impossible to say.

DrEskimo

It's a very substantial sum of money over a very long period during a very uncertain time....

Why do you need to borrow so much? How much do you have saved and how much do you save each month?

Nebulous2

£25k and 7 years gives them a lot of risk - and they want paid for it. That smacks of desperation to a lender.

The best deals are often £7.5-£15k over 3 years. 

Do you have a partner? Could you split the loan between two of you? On your income, do you really need to take 7 years to repay a loan? 

Mr_Eko

Thanks for the replies!

I’ve had a few loans in the past... 5%, 3% and 6% for the car. My friend was offered 13% as they had bad credit when they purchased their car. I have perfect credit. 19% is not representative!

Granted, this was before COVID. I got my car loan for £25k @ 6%, £20k a few years back at 3%, and £10k at 5% a year after the car loan. All paid. Not desperate, just curious.

Then bang - 19%. The repayment options for 3 and 5 years are still 16%.

Is this really to do with COVID?

[Deleted User]

No, it's to do with risk.

19% would only be a payday loan if you multiplied it by 200.

But you  certainly don't have perfect credit if you're getting 19%.  Check all your credit files to see what the issues are. Not the comedy scores, but the actual files. 

[Deleted User]

Your score is meaningless, no lender ever sees it

Check MSE Credit Club, Clear Score and Credit Karma and look carefully at every report to check for anything dodgy. Consider too existing debts and how much you want to borrow

Also, even for a 60k salary, 25k unsecured debt is very high risk for a lender. Depending on what you need the money for, it might be better to split it into smaller amounts and do it over time

Mr_Eko

Deleted_User said:

No, it's to do with risk.

19% would only be a payday loan if you multiplied it by 200.

But you  certainly don't have perfect credit if you're getting 19%.  Check all your credit files to see what the issues are. Not the comedy scores, but the actual files. 

Hi, thanks for the reply.

I have. There’s nothing there, genuinely. Never missed a payment. Never defaulted. Great available credit. No blacklisted address. And a pretty awesome comedy score to boot!

That’s why I’m asking. 

Mr_Eko

Deleted_User said:

Your score is meaningless, no lender ever sees it

Check MSE Credit Club, Clear Score and Credit Karma and look carefully at every report to check for anything dodgy. Consider too existing debts and how much you want to borrow

Also, even for a 60k salary, 25k unsecured debt is very high risk for a lender. Depending on what you need the money for, it might be better to split it into smaller amounts and do it over time

Hi, appreciate the response!

Sorry when I said ‘score’ I meant report.

There’s literally nothing dodgy on my credit report. That’s why I’m asking. I have all of the apps, paid services - Karma, ClearScore, Experian etc. Ordered the full report too.

No other debts.

Plus I had a £20k loan @ 3% before so it’s nothing to do with the amount clearly.

My question was: do they need to tell me exactly what the issue is or is that not true?

Thanks!

[Deleted User]

Mr_Eko said:

Deleted_User said:

Your score is meaningless, no lender ever sees it

Check MSE Credit Club, Clear Score and Credit Karma and look carefully at every report to check for anything dodgy. Consider too existing debts and how much you want to borrow

Also, even for a 60k salary, 25k unsecured debt is very high risk for a lender. Depending on what you need the money for, it might be better to split it into smaller amounts and do it over time

Hi, appreciate the response!

There’s literally nothing dodgy on my credit report. That’s why I’m asking. I have all of the apps, paid services - Karma, ClearScore, Experian etc. Ordered the full report too.

No other debts.

Plus I had a £20k loan @ 3% before so it’s nothing to do with the amount clearly.

Anyone actually know or....?

Maybe stop wasting money on the pointless paid CRA services?

Clearly it IS to do with the amount and indeed, the current climate. What you got in the past is nothing to do with the current day. Borrow less or take the 19%. On 60k a year you should be able to save plenty of cash a month anyway so delay your purchase and save

Mr_Eko

Deleted_User said:

Mr_Eko said:

Deleted_User said:

Your score is meaningless, no lender ever sees it

Check MSE Credit Club, Clear Score and Credit Karma and look carefully at every report to check for anything dodgy. Consider too existing debts and how much you want to borrow

Also, even for a 60k salary, 25k unsecured debt is very high risk for a lender. Depending on what you need the money for, it might be better to split it into smaller amounts and do it over time

Hi, appreciate the response!

There’s literally nothing dodgy on my credit report. That’s why I’m asking. I have all of the apps, paid services - Karma, ClearScore, Experian etc. Ordered the full report too.

No other debts.

Plus I had a £20k loan @ 3% before so it’s nothing to do with the amount clearly.

Anyone actually know or....?

Maybe stop wasting money on the pointless paid CRA services?

Clearly it IS to do with the amount and indeed, the current climate. What you got in the past is nothing to do with the current day. Borrow less or take the 19%. On 60k a year you should be able to save plenty of cash a month anyway so delay your purchase and save

Hi!

Oh come on - as if I’ve paid for them. They are all free trials. I was curious to see if there was anything beyond the actual score itself.

It doesn’t really answer the question though - companies like Zopa state on their website say that you have a ‘great’ credit score and that means you have the ‘best chance at getting the best rates’ and that the ‘score’ is only 50% of the decision. The other 50% is disposable income, of which I have plenty. Then slap you with a 13-15% rate. That’s a tiny little bit misleading.

I know COVID is a factor but SOME people are getting those rates.

I’m just curious and thought I’d ask.

Thanks for the tips!