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  • FIRST POST
    • DTP71
    • By DTP71 14th Sep 18, 1:49 PM
    • 1Posts
    • 0Thanks
    DTP71
    Indicative and Actual APR
    • #1
    • 14th Sep 18, 1:49 PM
    Indicative and Actual APR 14th Sep 18 at 1:49 PM
    A first time poster here, so please bare with me.

    I was looking for a loan to do some home improvements, did my research on the best rates (using this site and two others) and decided to go for M&S Finance who were offering 2.9% APR. I was directed to their site, did the initial ďhow much do you want and for how longĒ questions then went on to complete the application.

    The application was accepted immediately all I had to do is sign the paperwork, when I get it, and return it to M&S Finance. I received the paperwork yesterday and the quoted APR is now 5.9%, and therefore Iíll end up paying £2k in interest rather than the £1k I originally thought.

    I called M&S to clarify and they informed me that not everyone will get the 2.9% because of their personal circumstances, but would not expand any more.

    Iíve checked my credit rating which has come out as green and higher than the national average, Iíve been in my house over 3 years, in my job over 3 years, my mortgage loan to value is less than 60% and my monthly salary after mortgage and bills is enough to cover the monthly repayments. Earlier this year I completed a personal loan, in accordance with the terms, where the monthly repayments were greater than the M&S loan I was applying for. All good, so I thought.

    What I canít understand, and what M&S canít (or wonít) tell me is why I am considered a high risk to the extent that they double the quoted APR. I know their website states that ďCustomers that do not meet our normal criteria may be offered a different APR to our standard ratesĒ, but this just feels like youíre hooked in then offered something completely different to what you thought you were signing up for

    They tell me itís not false advertising because some people do get the advertised rates, but it feels morally wrong to quote you one thing, take you through the process then ask you to sign for double the interest.

    Has anyone had a similar experience and how did you tackle it?
Page 1
    • Willing2Learn
    • By Willing2Learn 14th Sep 18, 1:54 PM
    • 1,836 Posts
    • 1,419 Thanks
    Willing2Learn
    • #2
    • 14th Sep 18, 1:54 PM
    • #2
    • 14th Sep 18, 1:54 PM
    On the opening page on the M&S loans website, it clearly states twice
    Customers who do not meet our normal lending criteria may be offered a loan at a different APR. This will depend on your personal circumstances. The loan amount and term you request will also impact the rate offered.
    How can that be false advertising? It seems to me that you did not read the text on the screen, or misunderstood what the advertised representative rate actually meant.

    Edit: And welcome to the forum DTP71
    Last edited by Willing2Learn; 14-09-2018 at 2:00 PM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • molerat
    • By molerat 14th Sep 18, 1:56 PM
    • 19,738 Posts
    • 13,961 Thanks
    molerat
    • #3
    • 14th Sep 18, 1:56 PM
    • #3
    • 14th Sep 18, 1:56 PM
    Only 51% of successful applicants have to be offered the indicative rate.
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • Pixie5740
    • By Pixie5740 14th Sep 18, 2:20 PM
    • 13,371 Posts
    • 19,261 Thanks
    Pixie5740
    • #4
    • 14th Sep 18, 2:20 PM
    • #4
    • 14th Sep 18, 2:20 PM
    A first time poster here, so please bare with me.

    I was looking for a loan to do some home improvements, did my research on the best rates (using this site and two others) and decided to go for M&S Finance who were offering 2.9% APR. I was directed to their site, did the initial ďhow much do you want and for how longĒ questions then went on to complete the application.

    The application was accepted immediately all I had to do is sign the paperwork, when I get it, and return it to M&S Finance. I received the paperwork yesterday and the quoted APR is now 5.9%, and therefore Iíll end up paying £2k in interest rather than the £1k I originally thought.

    I called M&S to clarify and they informed me that not everyone will get the 2.9% because of their personal circumstances, but would not expand any more.

    Iíve checked my credit rating which has come out as green and higher than the national average, Iíve been in my house over 3 years, in my job over 3 years, my mortgage loan to value is less than 60% and my monthly salary after mortgage and bills is enough to cover the monthly repayments. Earlier this year I completed a personal loan, in accordance with the terms, where the monthly repayments were greater than the M&S loan I was applying for. All good, so I thought.

    What I canít understand, and what M&S canít (or wonít) tell me is why I am considered a high risk to the extent that they double the quoted APR. I know their website states that ďCustomers that do not meet our normal criteria may be offered a different APR to our standard ratesĒ, but this just feels like youíre hooked in then offered something completely different to what you thought you were signing up for

    They tell me itís not false advertising because some people do get the advertised rates, but it feels morally wrong to quote you one thing, take you through the process then ask you to sign for double the interest.

    Has anyone had a similar experience and how did you tackle it?
    Originally posted by DTP71
    It's not an indicative rate it's the representative APR which is legally defined as the rate 51% of successful applicants must be offered. You are one of the 49% and not just that you are also one of the 49% who are so aggrieved about "false advertising" and not being offered the representative APR you then sign up to the MSE Forum to complain about it. Use the search function, see how many have come before you.
    • venison
    • By venison 14th Sep 18, 10:48 PM
    • 2,614 Posts
    • 2,989 Thanks
    venison
    • #5
    • 14th Sep 18, 10:48 PM
    • #5
    • 14th Sep 18, 10:48 PM
    OP credit ratings be they numbers or colours mean nothing and no one sees them except you, its credit history that matters.
    Looking forward to 2019 after a terrible 2018...onwards and upwards
    • DCFC79
    • By DCFC79 14th Sep 18, 10:53 PM
    • 33,146 Posts
    • 20,871 Thanks
    DCFC79
    • #6
    • 14th Sep 18, 10:53 PM
    • #6
    • 14th Sep 18, 10:53 PM
    Is this a new trend where the OP posts about not being offered the advertised rate ?


    It really isn't false advertising.
    • zozan
    • By zozan 15th Sep 18, 12:46 AM
    • 2 Posts
    • 0 Thanks
    zozan
    • #7
    • 15th Sep 18, 12:46 AM
    • #7
    • 15th Sep 18, 12:46 AM
    A Representative APR is a financial service concept in which credit or loan interest rates quoted through advertising media are required to take into account all charges associated with a product, in addition to the interest rate.
    • Craig1981
    • By Craig1981 15th Sep 18, 5:31 AM
    • 565 Posts
    • 279 Thanks
    Craig1981
    • #8
    • 15th Sep 18, 5:31 AM
    • #8
    • 15th Sep 18, 5:31 AM
    You are one of the 49% and not just that you are also one of the 49% who are so aggrieved about "false advertising" and not being offered the representative APR you then sign up to the MSE Forum to complain about it..
    Originally posted by Pixie5740
    lets not pigeon hole everyone in the 49%....
    • mustiuc
    • By mustiuc 15th Sep 18, 6:13 AM
    • 30 Posts
    • 13 Thanks
    mustiuc
    • #9
    • 15th Sep 18, 6:13 AM
    • #9
    • 15th Sep 18, 6:13 AM
    I always found this representative apr STUPID!!!
    They should be "honest" or straight with you and tell you before you apply how much you can borrow and what apr you'll have.
    When I got my first cc, I was eligible for aqua advance, aqua classic and cap1. All 34.9%. After I applied for Advance I got indeed 34.9%. My partner, instead, having almost "same" history, same income, same eligibility, she got 49.99%.

    Using Experian loan matcher I can get a 20k loan from two lenders. One is saying 3.5%, the other one 6.9%. Everyone should go to 3.5% right? I am 99.9% sure they will give me 7-8-9%APR. Isn't better to go straight to second?
    If you refuse the loan/Apr... you can't apply immediately to another lender because of "credit history", "hard search" and other funny words.
    Yes, you are hooked before you apply for it.
    • Herzlos
    • By Herzlos 15th Sep 18, 6:40 AM
    • 8,635 Posts
    • 7,930 Thanks
    Herzlos
    But you need to apply in order to give them the information used to give you a quote.
    That's why there's a representative Apr.
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