The cost of borrowing changed!

challie1993

Hi there

I took out a loan with Virgin Bank, after running a soft search they quoted me the loan amount I asked for, plus £200 for the cost of the loan. However when they did the hard search on my credit file, that £200 became £450! I feel like I have been misled and scammed by virgin bank. 

My point is they had all the information available to them after running a soft search to provide a quote which I accepted, but doubled it after I’ve had a hard search, by which point I can’t get a quote elsewhere without seriously harming my credit report. Why quote me at all after a soft search if they won’t honour it? It’s the only industry like it, you wouldn't go into a shop and pick up something for £20 only to get to the till and they change the price to £45. because they would be a scam… 

Can I challenge them on this to reduce it to the original “advertised quote,” if so what with?

TIA

Nasqueron

Assuming the "cost" of the loan means interest?

Short answer - no
Long answer - lenders only have to give the advertised rate to 51% of successful applicants, when you did a soft search it was based on the assumptions they have programmed in regarding your credit record. When they did the hard search they found you didn't meet those assumptions so they offered you a rate that reflected your credit worthiness. There is nothing you can do, this is how lending works.

Your shop analogy doesn't work because prices on the shelf are not advertised as subject to credit check

CliveOfIndia

challie1993 said:

My point is they had all the information available to them after running a soft search

No, the whole point of a soft search is that it gives them visibility of a subset of your credit data.  It's not until they do a hard search that they can see all of your data and come to a decision.  That's why a soft search/eligibility check can only ever be a rough guide.

challie1993 said:

by which point I can’t get a quote elsewhere without seriously harming my credit report.

One more application won't do any major damage.  It's generally reckoned that a couple of searches in quick succession is OK, it's when you get more than a couple that it starts to become a problem.