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Have you applied for a personal loan, then been offered one with a higher APR than advertised?

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MSE_Laura_F
MSE_Laura_F Posts: 1,611 MSE Staff
Sixth Anniversary 1,000 Posts Photogenic Name Dropper
edited 28 January 2022 at 4:13PM in Loans

We need your help. Have you applied for a personal loan and then been offered one with a higher APR than the advertised rate? What happened? How did you feel and what did you do?

Would you rather email us? Send your story to campaigns@moneysavingexpert.com.

We asked a similar question on the Forum last year about credit cards:
Have you applied for a credit card and NOT ended up with the advertised APR?

Thank you to the people who replied to that one. This time we're focussing on personal loans.

«13

Comments

  • No No No No No

  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    A campaign to try and get banks to accept loan requests from unsuitable people?
    Look on the bright side.  If this is the purpose, and it's successful, we can look forward to a whole raft of entertaining threads in future from people looking for com-pun-say-shun for "mis-sold" loans.  I wish I could get me one of those - take out a loan then not have to pay it back :smile:

  • A campaign to try and get banks to accept loan requests from unsuitable people?
    Look on the bright side.  If this is the purpose, and it's successful, we can look forward to a whole raft of entertaining threads in future from people looking for com-pun-say-shun for "mis-sold" loans.  I wish I could get me one of those - take out a loan then not have to pay it back :smile:

    More likely another campaign to complain banks are now not lending to anyone or don't advertise any % 
  • Exodi
    Exodi Posts: 3,923 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Combo Breaker
    edited 31 January 2022 at 12:04PM
    While I agree with all the other posters in this thread (giving loans to higher risk applicants is a bad idea) - the only reasonable campaign I'd support is arround the hard searching behind this. It is unfortunate that Joe Bloggs would apply for a 4% loan of which he's told he's likely to be accepted, end up being offered an 8% loan but then having a hard credit search against him, limiting him to one or two more applications before he wouldn't even get a payday loan for 6 months.

    Why does there need to be such mystery around lenders affordability assessments?
    Know what you don't
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 31 January 2022 at 12:08PM
    Exodi said:

    Why does there need to be such mystery around lenders affordability assessments?
    Risk is priced. Peoples circumstances differ widely. Lenders criteria is commercially sensitive. Easy to compress a discussion in a few words to create headlines rather than educate and inform
  • Exodi
    Exodi Posts: 3,923 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Exodi said:

    Why does there need to be such mystery around lenders affordability assessments?
    Risk is priced. Peoples circumstances differ widely. Lenders criteria is commercially sensitive. Easy to compress a discussion in a few words to create headlines rather than educate and inform
    Theoretically, what would be the disadvantages of, for example, Nationwide saying:

    "To be eligible for a 4% loan, you need to -
    1) Be a home owner
    2) Have an income of £30k+
    3) Have no more than 3 dependents
    4) Not have other finance of more than £10k (excluding mortgage)"

    I'd imagine there are reasons not to do this (as otherwise they would be). They would get a stream of applicants they're happy accepting - admittedly they would lose the upselling of higher APR products to higher risk applicants.
    Know what you don't
  • Exodi said:

    Why does there need to be such mystery around lenders affordability assessments?
    Because the information is commercially sensitive, and proprietary.
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