2.8% loans don't exist

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Hi everyone, I'm trying to get a loan at a decent rate for a car.  But whenever I fill in the form I qualify for the 2.8% loans at the amount I want to borrow (£20k), but then after I've applied the confirmation comes back at 8/9%!  I appreciate you have to go through that process but I don't get how the rate can change when you've already supplied your income and outgoings before you apply!  Can anyone actually get these rates?  How do you qualify? I find it so misleading.
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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    edited 9 September 2021 at 9:06AM
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    Yes, at least 51% of applicants get the headline rate, so they most definitely exist.

    Your risk levels are too high for lenders to feel comfortable offering you the lower rate.  Use more of your savings to reduce the amount you need to borrow.
  • Cammie23
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    Thanks for this, just had a long chat with them on the phone - the frustrating bit is not knowing which factor is preventing you getting the rate and that they lead you to believe you've qualified with the calculator, and it's not until you've applied that you find out it's massively higher! Now I have 5 credit checks on my file in 24 hours!!  And actually I've found the rate goes up even higher if you try to borrow less!
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    edited 9 September 2021 at 9:51AM
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    The most obvious factor is going to be affordability, with a loan of that size. But you need to stop making applications until you have a better understanding of your situation. Five applications in a day is somewhat unhinged.

    Check your three credit files to see what appears on each, and also consider how the 20k looks in relation to your income. If you're earning 40-50k or above, you may be ok, but if not, you represent a higher risk.


  • Emmia
    Emmia Posts: 3,190 Forumite
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    You really don't need to spend £20k on a car - it's almost always a rapidly depreciating asset.

    Also with that many applications, lenders (and the algorithms they use to make decisions) can sense your desperation.
  • Cammie23
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    Thanks - unhinged is a little strong!!  I'll ignore that!
    My salary is well above that so like I said before, keen to understand how these things are calculated - any tips on how to find that out would be appreciated.  The reason I've made these applications is because I was due to pay the deposit on a car today, and had somewhat ignorantly assumed that based on the information on the lenders websites, having entered my income and outgoings and being offered a rate of 2.8%, that when I applied this would be the rate I got.
    From a very 'hinged' but slightly confused person.....
  • k3lvc
    k3lvc Posts: 4,174 Forumite
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    I applied with Sainsburys - accepted and money in account next day at 2.8% - I'm obviously one of the 51% ;) 
  • Cammie23
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    That's interesting, thank you - I just did Experian credit score and apparently it's excellent so I'm really confused as to why I'm not in the 51% - good salary, home owner, no debts, very limited finance eg just one existing car loan....
  • Cammie23
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    Emmia said:
    You really don't need to spend £20k on a car - it's almost always a rapidly depreciating asset.

    Also with that many applications, lenders (and the algorithms they use to make decisions) can sense your desperation.
    Appreciate that but Sainsbury's was the first loan I applied for, and all preliminary applications so apparently none affect your credit score.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    edited 9 September 2021 at 10:14AM
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    Cammie23 said:
    That's interesting, thank you - I just did Experian credit score and apparently it's excellent so I'm really confused as to why I'm not in the 51% - good salary, home owner, no debts, very limited finance eg just one existing car loan....
    The score is irrelevant, It's just a gimmick, like a horoscope. Fun to look at, but pointless.
    You need to be checking the data that's on each of your files.

    Your existing loan is going to a further negative factor. Increasing borrowing at the current time is challenging. Lenders are looking for debts to be reducing.
  • Ebe_Scrooge
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    Cammie23 said:
    keen to understand how these things are calculated - any tips on how to find that out would be appreciated.
    Apply for a job at the bank in either the IT or Risk Control departments - that's about the only way you'll know what a particular lender's criteria are.  Lending criteria vary from lender to lender and are confidential - think about it, if they published their criteria, you'd just tweak your application to make you look like their ideal target customer.
    Bottom line - you don't meet their criteria of a "perfect" borrower.  Ignore the twaddle peddled by Experian and the like, they cannot possibly know what that lender's criteria are.  Buy a cheaper car - if your salary is "well above" £50K and no debts, how come you've not got savings you can use?
    Oh, and 5 loan applications in 24 hours will have pretty much scuppered any chance of getting a decent rate for the next few months.

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