loan successful

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jdave76
jdave76 Posts: 6 Forumite
in Loans
" I'm pleased to tell you that your application for £8000 at 15.9% APR has been successful."

But my application was for a loan at 3.1%. lol
they lie, and just mess up your credit file with pointless searches.

something needs to be done about the loan industry, and this is one of the better company's. :(
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  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    £10 to a charity of your choice says you applied for a loan with a representative rate of 3.1% APR.
  • jdave76
    jdave76 Posts: 6 Forumite
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    yes sure did, but there is no way of knowing what your applying for. it did say 90% chance and I thought 50% of people had to get the headline rate. it just wrong. :0(
  • robber2
    robber2 Posts: 558 Forumite
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    no you were not wrong , you were just a part of the other 50%

    Rob
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    edited 11 July 2017 at 10:47PM
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    Just like lenders don't know how much of a risk (or profit) you will be until a credit check is performed.

    You seem to understand it was a representative rate (the representative rate is the rate offered to 51% of successful appliacants) so what lies have been told?

    What would you like to be done about the loan industry? For lenders only to offer loans at the representive rate? That would mean those that don't quite cut the mustard wouldn't be offered any finance at all, not even at a higher rate. Alternatively it could mean higher loan rates for everyone even those who are low risk borrowers.
  • jdave76
    jdave76 Posts: 6 Forumite
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    Think it would be much better if they got rid of typical APR balls, and just advertised the rate you
    Would get if successful, and the searches didn't effect your chance of getting another loan.
  • Clive_Woody
    Clive_Woody Posts: 5,855 Forumite
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    You apply for a loan of a certain amount, the APR comes afterwards from the lender based on various criteria. They are required to quote a representative APR, which 51% of successful applicants will get.

    You do not apply for a loan at a certain rate, you apply for an amount and the rate comes later. It is a common misconception that you have applied for a loan at the representative rate.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • forgotmyname
    forgotmyname Posts: 32,552 Forumite
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    jdave76 wrote: »
    Think it would be much better if they got rid of typical APR balls, and just advertised the rate you
    Would get if successful, and the searches didn't effect your chance of getting another loan.


    How can they advertise the rate at which YOU will be successful when they do not know you and what your credit history is like?

    It's only AFTER they check your details that they know whether your the customer they want and at what rate to offer you.
    Censorship Reigns Supreme in Troll City...

  • jdave76
    jdave76 Posts: 6 Forumite
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    just think the current system stops competition ,to find out what your buying you have a search on your file which. so to shop about you would end up with lots of searches on your file which is bad.
    I think after a soft search or full search that doesn't effect anything, on a comparison site you should be pre approved for the rate that are willing to give you.

    Pies 50p, get to the till, oh it's £2.50 for you. :j
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    That's a poor analogy. When you pay for a pie in a shop that's it, you've paid and the shop has it's money, the transaction is over. With loans lenders are giving you money to be repaid over a set time period. They have to assess the risks and rewards of giving you £Xk and your likelihood of repaying in full and on time. For whatever reason the lender you applied to thinks you are a higher risk/will be less profitable than the 51% offered loans at 3.1% APR.

    Until a full application has been submitted and "hard" credit checks carried out there is no way of analysing you as a borrower that is sufficient enough to guarantee the rate you will get. It's very similar to people getting a mortgage DIP from a lender that uses "soft" searches for the DIP then being declined or offered a smaller mortgage once the full application has been submitted.

    Each lender has there own way of determining whether to lend to you and at what rate. Some will be more put off by numerous searches than others.
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    jdave76 wrote: »
    Think it would be much better if they got rid of typical APR balls, and just advertised the rate you
    Would get if successful, and the searches didn't effect your chance of getting another loan.

    If you feel the system needs changing then go and campaign for it to be changed.

    Current system has worked for years so why change it if its not broke.
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