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  • FIRST POST
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 9:17 AM
    • 96Posts
    • 67Thanks
    FrankRizzo
    Advertised Loan Intrest rates on MoneySavingExpert
    • #1
    • 9th Aug 18, 9:17 AM
    Advertised Loan Intrest rates on MoneySavingExpert 9th Aug 18 at 9:17 AM
    Why do loan companies advertise interest rate on their site but when you apply you get a higher interest rate than initially advertised?

    This makes shopping around extremely difficult. !!!128533;
Page 1
    • zx81
    • By zx81 9th Aug 18, 9:22 AM
    • 18,072 Posts
    • 19,287 Thanks
    zx81
    • #2
    • 9th Aug 18, 9:22 AM
    • #2
    • 9th Aug 18, 9:22 AM
    Because you are a higher risk applicant, so get a higher rate.

    Lenders show the headline rate, that 51% or more of accepted applicants will receive.
    • Pixie5740
    • By Pixie5740 9th Aug 18, 9:22 AM
    • 12,698 Posts
    • 18,125 Thanks
    Pixie5740
    • #3
    • 9th Aug 18, 9:22 AM
    • #3
    • 9th Aug 18, 9:22 AM
    Why do loan companies advertise interest rate on their site but when you apply you get a higher interest rate than initially advertised?

    This makes shopping around extremely difficult. !!!128533;
    Originally posted by FrankRizzo
    Representative APR. 51% of successful applicants receive that rate you are one of the 49%. It's been covered ad nauseam on the forum. It's also covered on the MSE website.

    https://www.moneysavingexpert.com/loans/personal-loans-apr-examples/
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 9:32 AM
    • 96 Posts
    • 67 Thanks
    FrankRizzo
    • #4
    • 9th Aug 18, 9:32 AM
    • #4
    • 9th Aug 18, 9:32 AM
    Ok great thank you! Iím going to apply for Tesco below and see how much the rate shoots up !!!128516;. You would think the FSA or whoever would take issue with this?

    The representative example: If you borrowed £11,000 over 1 year at a representative rate of 4.9% APR, plus £33 borrowing fee included and an annual interest rate of 4.3% (fixed), you would pay £941 per month. Total interest cost over the term would be £288, meaning you would pay £11,288 in total (£11,000 loan + £288 interest).
    • zx81
    • By zx81 9th Aug 18, 9:34 AM
    • 18,072 Posts
    • 19,287 Thanks
    zx81
    • #5
    • 9th Aug 18, 9:34 AM
    • #5
    • 9th Aug 18, 9:34 AM
    No. The wording is compliant and the FCA won't mind you applying for a loan.
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 9:36 AM
    • 96 Posts
    • 67 Thanks
    FrankRizzo
    • #6
    • 9th Aug 18, 9:36 AM
    • #6
    • 9th Aug 18, 9:36 AM
    I think Martin should start a campaign !!!128515;
    • zx81
    • By zx81 9th Aug 18, 9:37 AM
    • 18,072 Posts
    • 19,287 Thanks
    zx81
    • #7
    • 9th Aug 18, 9:37 AM
    • #7
    • 9th Aug 18, 9:37 AM
    For what purpose?
    • Pixie5740
    • By Pixie5740 9th Aug 18, 9:38 AM
    • 12,698 Posts
    • 18,125 Thanks
    Pixie5740
    • #8
    • 9th Aug 18, 9:38 AM
    • #8
    • 9th Aug 18, 9:38 AM
    Ok great thank you! Iím going to apply for Tesco below and see how much the rate shoots up !!!128516;. You would think the FSA or whoever would take issue with this?
    Originally posted by FrankRizzo
    Why do you think the FCA (FSA no longer exists) would take issue with this?

    The majority of successful applicants get the advertised rate and the rates are being advertised as representative not absolute. Would you prefer it if lenders just straight out rejected you 49%ers?

    Have you tried using the MSE loan eligibility calculator or are you just applying for loans willy nilly?
    • Clive Woody
    • By Clive Woody 9th Aug 18, 11:29 AM
    • 4,501 Posts
    • 5,097 Thanks
    Clive Woody
    • #9
    • 9th Aug 18, 11:29 AM
    • #9
    • 9th Aug 18, 11:29 AM
    Why do loan companies advertise interest rate on their site but when you apply you get a higher interest rate than initially advertised?

    This makes shopping around extremely difficult. !!!128533;
    Originally posted by FrankRizzo
    They don't, I've always got the representative rate advertised.
    Rugby Union - The Greatest Game
    • DCFC79
    • By DCFC79 9th Aug 18, 1:18 PM
    • 32,318 Posts
    • 20,328 Thanks
    DCFC79
    I think Martin should start a campaign !!!128515;
    Originally posted by FrankRizzo
    Another poster who has a gripe with lenders not offering the representative rate.

    What exactly do you want Martin to do Frank ?

    No he won't start a campaign on something that's perfectly fine.
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 3:34 PM
    • 96 Posts
    • 67 Thanks
    FrankRizzo
    They don't, I've always got the representative rate advertised.
    Originally posted by Clive Woody
    Do you know how they assess what rate a customer should get?
    • zx81
    • By zx81 9th Aug 18, 3:35 PM
    • 18,072 Posts
    • 19,287 Thanks
    zx81
    Risk based credit scoring.
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 5:10 PM
    • 96 Posts
    • 67 Thanks
    FrankRizzo
    So if you are a higher risk you get a worse interest rate or is it the opposite ? Canít see the logic in that??
    • FrankRizzo
    • By FrankRizzo 9th Aug 18, 5:12 PM
    • 96 Posts
    • 67 Thanks
    FrankRizzo
    They don't, I've always got the representative rate advertised.
    Originally posted by Clive Woody

    Whatís your secret to getting the best rate every time?
    • zx81
    • By zx81 9th Aug 18, 5:12 PM
    • 18,072 Posts
    • 19,287 Thanks
    zx81
    Yes, that's how it works.

    It's entirely logical. If you have a group of customers who are more likely to default, you need a greater interest return to cover the higher losses.

    You wouldn't give low risk customers a high rate because you wouldn't get any customers.
    • DCFC79
    • By DCFC79 9th Aug 18, 8:40 PM
    • 32,318 Posts
    • 20,328 Thanks
    DCFC79
    What!!!8217;s your secret to getting the best rate every time?
    Originally posted by FrankRizzo
    Im afraid Clive can't let you in on the secret.

    If you want the secret you need to let some money pass the greasey palms of certain posters on here.
    Last edited by DCFC79; 09-08-2018 at 8:42 PM.
    • forgotmyname
    • By forgotmyname 9th Aug 18, 10:00 PM
    • 27,443 Posts
    • 11,081 Thanks
    forgotmyname
    Secret to getting the best rate... You must keep it a secret and not tell anyone else....

    Martin would get the advertised rate.....



    Have enough money not to need the loan in the first place... Shhh keep it a secret.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • Clive Woody
    • By Clive Woody 10th Aug 18, 12:14 AM
    • 4,501 Posts
    • 5,097 Thanks
    Clive Woody
    Whatís your secret to getting the best rate every time?
    Originally posted by FrankRizzo
    Manage your finances really well. Pay your debts on time, do not over stretch yourself, have realistic expectations about how much you can borrow, do your research in advance. Essentially ensure your credit file makes you an attractive prospect to lenders and gives them confidence that they will get their money back on time as per the agreement.

    Not wishing to sound like I am bragging, but earning a significant wage also helps, but still living well within your means.

    Even then be prepared for the fact that potentially you may still not get the headline rate, there are other lenders and often the spend you had planned can be delayed.
    Rugby Union - The Greatest Game
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