Loan option

NorthernJoe27

Hi,

I am wondering which loan to apply for. I have 2 options available to me. One for the amount I want, second for a higher amount than I need but with a higher chance of acceptance.

What are possible options? Maybe second to help get it over the line and then pay back what I don’t need straight away.

thanks.

MorningcoffeeIV

Impossible to say on that scant information.

But if you only have two options, you probably need to re-evaluate your need for borrowing and look at alternatives.

NorthernJoe27

Ok, perhaps I can be a bit clearer.

I have looked at options available to me and loan is the right one for my circumstances. There are several options for loans having looked around but these are the 2 I’ve whittled it down to.

Option 1 is for the loan amount I want, with an 85% acceptance chance.
Option 2 is for higher than what I want but with a 95% acceptance chance.

To protect everything and making sure I have been efficient with my application, is option 2 viable? Both have same APR the only difference is the provider. My plan is pay off the excess amount I don’t need, as soon as it is possible with the provider, off the loan if I was to choose option 2.

Does that make more sense?

Nebulous2

How much higher? There are key thresholds with loans, where rates drop. You usually get better rates over £7500 for example. It can be worth going above that threshold to get the lower rate, then paying the excess off, for people who qualify. 

If the second loan takes you into a better level, then having the same rate isn't necessarily as good a deal. 

MalMonroe

If I had to have a loan, I would go for the lower one. Because I've been in very bad debt in the past, am now debt free and I'm scared of ever being in that position again, so the smaller the loan, the better for me. And if there are two hard searches on my credit file, it's not the end of the world.

But I have to say that now, the word 'loan' gives me shivers up my spine. Whatever anyone's best intentions, there's always a risk that the amount you say you'll repay (is there any penalty for early repayment btw?) changes and that you may intend to pay back what you don't want to use but it doesn't happen. Acceptance 'chances' are just that, chances - you may not be granted either option. I don't think it's ever a good idea to accept a loan for more than you actually need. 

Please remember what this very site advises about loans "Remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible'."

Hope that helps in some small way. 

cymruchris

The difference between 85 and 95 percent chance is going to be marginal. Have you looked at comparison websites? Or have you completed eligibility checks directly on the lenders websites?

If comparison, I'd go directly to the lender's website and see what their eligibility checker says for your circumstances and amounts requested to decide which to go for, if the ultimate goal is simply to get a loan for £X then that's what I'd go for, unless a few hundred pounds extra on the loan got me into a cheaper APR, and then as you say overpay to reduce your balance. 

[Deleted User]

Is the 85% or 95% on sites like credit agencies or sites like MSE who get affiliate fees for referring people?

Do a search on the lender's own site and go from there, 85% or 95% is a meaningless number if you haven't done a proper credit check