Loan accepted but at much higher rate

MattEng · 29 September 2018 at 12:58PM

Hi all.
This morning I applied for a £10k loan to purchase a new car. I've got a decent credit rating and after looking at the providers advertised on MSE. I applied for a loan with Santander for £10k over 3 years at the advertised Apr of 2.8%.
I have just had an email to say its been accepted but at a rate of 11.9%. I'm not happy to proceed at this rate so what are my options?
Can I negotiate with the bank?
Should I cancel and try elsewhere?
I have the savings to cover the car cost but I feel more comftable paying via a loan, especially when the interest over 3 years would only be £400.
I'm also a little annoyed as I was unaware the loan could be accepted but at a higher rate. (I know it would probably be in the extra small print but who has time to read all that)

Any advice?

Cheers Matt

antrobus · 29 September 2018 at 1:10PM

It's a representative rate. 50% of applicants will be offered that rate. You're in the other 50%.

You can try negotiating, but it would be a waste of time. Try elsewhere.

iainscomputer · 29 September 2018 at 1:18PM

Hi, I had the same thing happen with Hitachi Credit about 4 years ago, the rate wasn't as high as offered to you, but I didn't want to proceed.
But before I knew it, the money was in my account. I'm not happy that they don't check the terms are acceptable before the money is transferred.
I just paid it all back immediately, but it was a bit of hassle & I could easily have been liable for some substantial interest.

DCFC79 · 29 September 2018 at 1:41PM

Is Santander your own bank ?
If not give your own bank a try.

Unfortunately your credit rating is of no use to lenders as they see your history.
Give 1 more application a try.

Do you have any debts ?

MattEng · 29 September 2018 at 2:11PM

The only debt I have is my Mortgage.
I've never missed a payment on anything and have had decent savings since a year or 2 after buying my house.
I can't see a reason why I'd not get a decent rate.

Nebulous2 · 29 September 2018 at 2:25PM

They need to offer 51% of successful applicants the representative rate.

That means the people who apply for tabletopping loans are competing in a very select group with lots of others with very good history.

I'm convinced if you move down a few places in the best buy tables you'll have a much better chance of success.

You can't make too many applications though, so keeping trying doesn't work. One more would be sufficient for 6 months or so.

BakingC · 29 September 2018 at 3:21PM

Lenders aren't always looking for people with excellent records. They are also looking for people to make more money off in the future. You say you already have a mortgage perhaps their ideal customer for loans that size is somebody they can cross sell to and sell them a mortgage in the future.

Also element of competition for the very top rates if you tried at 3-3.2% maybe you would have better luck

iolanthe07 · 30 September 2018 at 3:33PM

People seem to take it personally when they don't get offered the headline rate, but it may just be that the lender has filled their quota of 51% for that month. Why would they offer cheaper loans when they don't have to?

Loan accepted but at much higher rate

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