Asking for a better rate

SevenOfWine

I’ve been approved for a personal loan, which I’m going to use to replay my outstanding car loan which is at a higher rate. I’ve just found out I am getting an increase, and wonder if that makes me a better risk. It is worth asking them to reassess the interest rate and see if they are willing to reduce it? 

CliveOfIndia

You mean you're getting a pay increase?  If so, how much (in percentage terms) ?  If it's a significant rise then it may possibly be worth asking, but unless it is a significant increase, it's probably not worth it.

And in any event, it's highly likely that they would need you to make a fresh application, with the hard search associated with it.  Bear in mind that the rate you're offered is not dictated by a human, but by a computer algorithm that churns your credit data and spits out an answer.

Overall, on balance, I'd say it's probably not worth bothering about.  Unless, as I say, you're talking about a very significant pay rise.

Nebulous2

There's a risk that you are seen to be gaming the system making another application with different income declared. 

Where a lender thinks there is a discrepancy in information about income they can ask for 3 months payslips. 

If the increase has just been announced its unlikely to be showing on your payslips yet. 

I'd proceed cautiously, possibly waiting until you have proof of the new income before submitting another application. 

MattMattMattUK

SevenOfWine said:

I’ve been approved for a personal loan, which I’m going to use to replay my outstanding car loan which is at a higher rate. I’ve just found out I am getting an increase, and wonder if that makes me a better risk. It is worth asking them to reassess the interest rate and see if they are willing to reduce it? 

I would very much doubt that it is. Just use the extra money to overpay the loan, most loans allow an amount of early repayment, just figure out what that is and pay up to that amount.