Apr MILES higher than expected - what to do?

samstown

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

MattMattMattUK

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

Ringing them will do nothing, they offered you a rate based on your circumstances and their appetite for and pricing in risk. 
How much debt do you already have, how much credit facility do you have, how much do you earn and how much are you trying to borrow?

samstown

MattMattMattUK said:

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

Ringing them will do nothing, they offered you a rate based on your circumstances and their appetite for and pricing in risk. 
How much debt do you already have, how much credit facility do you have, how much do you earn and how much are you trying to borrow?

I wasnt going to phone m&s i was going to phone my bank nationwide and see if they could do better

3k available on credit card with about 800 to pay next month. As i say, i normally pay it in full every month anyway regardless of amount on it.

Klarna is about 140 left. Did that 0% pay over 3 months on some holiday clothes/suitcase etc

Mortgage about 120k

Pay 37k 

Outgoings per month is about 500 (home bills shared with husband) 

I've bolded the parts of the post you've missed. I understand how the give apr, but the question I am asking is 

Is there any point speaking to another provider to see what apr they would give me? Or is it likely to be worse now I've already applied for a loan

And should I check my credit report as 10k should be relatively low risk for someone like me. My intention is to pay it off quicker than the 3 years I've borrowed it over

MorningcoffeeIV

samstown said:

MattMattMattUK said:

samstown said:

And should I check my credit report as 10k should be relatively low risk for someone like me. My intention is to pay it off quicker than the 3 years I've borrowed it over

Check all three.

Then try applying elsewhere.

DrEskimo

As above, no harm in trying to apply somewhere else. Many posters have and have then managed to get the representative rate from another lender, but maybe 0.1 or 0.2 percentage points higher than the cheapest advertised lender.

Of course the MSE thing would be to save up and buy the car in cash, or look at cheaper alternatives. There is no way you, or anyone, can know for sure whether you can pay the loan in full over the 3/4/5 year term. Case in point, you don't have £10k saved today for the car as presumably the money has been needed for other things? Besides, life happens to everyone, including illness, job loss, pandemics, recessions, etc etc.

The good thing about shifting away from using credit at all is you end up not having to worry at all about how anyone perceives your credit worthiness. You make more informed decisions about what to spend your money on, and realise that there are many ways to achieve your goals that don't mean lining the profits of multi-billion pound finance companies. I personally work hard enough for my money that I want to give away as little as I can!

samstown

DrEskimo said:

As above, no harm in trying to apply somewhere else. Many posters have and have then managed to get the representative rate from another lender, but maybe 0.1 or 0.2 percentage points higher than the cheapest advertised lender.

Of course the MSE thing would be to save up and buy the car in cash, or look at cheaper alternatives. There is no way you, or anyone, can know for sure whether you can pay the loan in full over the 3/4/5 year term. Case in point, you don't have £10k saved today for the car as presumably the money has been needed for other things? Besides, life happens to everyone, including illness, job loss, pandemics, recessions, etc etc.

The good thing about shifting away from using credit at all is you end up not having to worry at all about how anyone perceives your credit worthiness. You make more informed decisions about what to spend your money on, and realise that there are many ways to achieve your goals that don't mean lining the profits of multi-billion pound finance companies. I personally work hard enough for my money that I want to give away as little as I can!

Im putting in 15k cash. Ive taken the loan over 3 years with full expectation to be done in 12-18 months max so its well within budget. Very few people are buying brand new/pre reg cars in cash. Most will do PCP or HP. 
At least with this, I will own it from day 1 and the amount I will owe on it at any point during the 3 years would be a lot over the selling or insurance price should anything go wrong. 

Finacially for me its a good investment. As I said in the OP I can afford it even on this rate, its maybe 15 per month more. But as with all things, why pay more for something? That 15 per month would be much better in my pocket...

TheBanker

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

If you log into Nationwide online banking, you can run a loan quote to see whether you'd be approved and what APR. So no need to phone them.

samstown

TheBanker said:

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

If you log into Nationwide online banking, you can run a loan quote to see whether you'd be approved and what APR. So no need to phone them.

All done. 6.9% - the advertised apr no less. Saving me about £8 per month but better off in my pocket! 

prowla

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

 They do that - the clickbait rate seems attractive and then they give you the actual "great news!" rate after you've applied.

samstown

prowla said:

samstown said:

Hi
I applied for 10k for a car loan. On mse website it had representative 4.9% and while I know not everyone gets that, I almost keeled over when it came back at 8.9%

I've always previously had excellent credit rating. I have in the last 2 months only made minimum payments on my credit card by accident. Literally never in my life not paid cc in full but had life stuff going on. Only have 3k max on that anyway! 
No other debt bar 3 things on klarna pay over 2 months. Never missed and could pay in full whenever. 

I CAN afford the loan at that rate but I feel a bit aggrieved that its so much higher and I'm not sure what to do next. 

I dont know whether to try checking my credit report to see whats going on

OR to ring nationwide (my building society and last person I had a loan with 5 years ago and current credit card provider) to see if they can do anything? There's no penalties for paying off (m&s loan) but I just don't want to ruin my credit rating by trying to get 10k here there and everywhere 😂 

 They do that - the clickbait rate seems attractive and then they give you the actual "great news!" rate after you've applied.

Yea its crap isnt it! Had me really worried something was wrong with my credit score. 
Im pretty good in terms of using credit and paying it back. Those 2 months recently are literally the only time in my life I have just let the bank take minimum payment rather than paying in full because I had some life things going on and it went out of my mind so when I got that rate I thought hell I've wrecked my score. 
Ultimately no harm as I said I could afford at that rate, just a bit of a shock.

Nationwide, higher in first instance but i got that rate so... note to future self..
 Just go nationwide 😂 

Now have to work out how to cancel the m&s one before i have 20k sat in my bank! You have right to cancel/send back within 14 days anyway so enough time to sort