Applications

LauraJobling

Hello, I applied for a low interest loan and was accepted however it wasn’t a guaranteed rate and it more than trebled with the approval. I am not going to accept, however My plan was to use this loan to pay off an existing home improvements finance with a high interest 8.9%. When is it safe to apply for another one as I’m aware this application will now show on my credit file as hard search. Thank you 

[Deleted User]

You will likely always get high rates if you are effectively trying to consolidate as they will judge you based on the two debts combined as you might use the second loan for a hot tip of Noggin the Nog at the 4:30 at Chepstow and now have twice the debt. It will also depend on their appetite for risk - your existing debt to income ratio, past credit behaviour etc

You can usually do 2 applications together without being a major issue but otherwise wait for 3 months

Check also all 3 of your credit files to make sure nothing is untoward

LauraJobling

Thank you. I’ve had the finance for 2 years it’s not new but I realised the APR is very high so had applied today for a low interest loan and when it approved it trebled. So I could apply for another today and be ok? Thank you 

macman

Check your file first. 

Ebe_Scrooge

LauraJobling said:

Thank you. I’ve had the finance for 2 years it’s not new but I realised the APR is very high so had applied today for a low interest loan and when it approved it trebled. So I could apply for another today and be ok? Thank you 

As macman says, first off check your files with all 3 CRAs.  Ignore the pretend score they give you as it's nothing more than a comedy gimmick.  But do check that the underlying data are factually correct, and that there are no negative markers on there.

But that aside, as Farfetch says, a lender will always make the assumption that a new loan will be in addition to, not instead of, any existing debt.  Therefore, the affordability calculations can become a significant factor in the rate they're prepared to offer you.

MrFrugalFever

You will have the right to make overpayments which will reduce your interest.
8.9% in the current climate isn’t actually all that bad.

how much is owing?

Do you have any credit cards with money transfer offers?

Sncjw

You are increasing your risk of when you apply as your doubling your debt. The lender will think your struggling to pay the debt off he ce why you go for a loan for the same amount even selecting consonlodationn as the reason will raise a red flag.