Loan rates

a l e x

Distinguished Member
Afternoon all,

Thinking of making a fairly large purchase soon and having received a letter from Santander offering a loan I looked into it... The loan was probably the cheapest way to buy it and decided I'd apply... The rate on the website was 4.4% for a loan of £6000. Just spent an hour on the phone with Santander to be told that I'm accepted but the rate would be 12.4%! A nice extra £1000 interest.

Now I keep my credit report up to date and know there's no abnormalities on there. I'm a home owner with mortgage and a small amount on a 0% credit card and no other debt. Noddle score me in the "Excellent" category as do Experian.

What makes the loan rate go so high? Bloke on the phone says it usually when you have high amounts available on credit cards but mine aren't particularly high... £5000 and £3000.

Any ideas?!

Thanks.
 

zed4

Well-known Member
That is a high rate. Do you bank with them?

I recently borrowed a substantial amount of money to buy a car, I used my own bank – First Direct. They agreed my loan over the phone within a couple of minutes, no credit check necessary as they just base it on my monthly cashflow in and out of my account. Really good service. My rate was 3.6%
 

a l e x

Distinguished Member
That is a high rate. Do you bank with them?

I recently borrowed a substantial amount of money to buy a car, I used my own bank – First Direct. They agreed my loan over the phone within a couple of minutes, no credit check necessary as they just base it on my monthly cashflow in and out of my account. Really good service. My rate was 3.6%
Yep, bank with them and only rang them because they sent me a letter advertising the low rate. No chance am I entertaining paying that rate!
 

FZR400RRSP

Banned
You may just be the victim of circumstance here.
To advertise a 'typical APR' they only have to give so many people that rate.
If they meet that target number, no need to give you that rate.
The trouble you may now face is trying to get a loan somewhere else.
The 'search' may/will be recorded on your credit record and you doing other searches looks like you're chasing credit.
So them offering that rate may mean others offer you equally high rates, or even turn you down.
It's a bastard, it really is.
 
Last edited:

Desmo

Distinguished Member
I had similar with Sainsburys. Fantastic credit rating and online rate was great...put in the application and watch the rate rocket. It's a bit of a joke to be honest.
 

a l e x

Distinguished Member
You may just be the victim of circumstance here.
To advertise a 'typical APR' they only have to give so many people that rate.
If they meet that target number, no need to give you that rate.
The trouble you may now face is trying to get a loan somewhere else.
The 'search' may/will be recorded on your credit record and you doing other searches looks like you're chasing credit.
So them offering that rate may mean others offer you equally high rates, or even turn you down.
It's a bastard, it really is.
I won't be bothering applying for another loan. Will get the money from elsewhere, loan was easy though. Never had one before, don't think I'll apply for another.
 

FZR400RRSP

Banned
I'm in the process of taking M+S finance to the ombudsman after they royally shafted me on a rate.
I was on a rate of 5.8%, I noticed their rate was down to 3.6% (at that time, now 3.3%)
So I phoned and spoke to a CS guy, who told me if I paid off the existing 5.8% loan I, as a customer of theirs for years and great credit rating, would have no issues getting a new loan at the low rate.
Lo and behold, I do all that and they slam 7.2% on me, no proper explanation, no apologies.
Naturally extremely pee'd off and I'm taking it as high as I can.
 

a l e x

Distinguished Member
I'm in the process of taking M+S finance to the ombudsman after they royally shafted me on a rate.
I was on a rate of 5.8%, I noticed their rate was down to 3.6% (at that time, now 3.3%)
So I phoned and spoke to a CS guy, who told me if I paid off the existing 5.8% loan I, as a customer of theirs for years and great credit rating, would have no issues getting a new loan at the low rate.
Lo and behold, I do all that and they slam 7.2% on me, no proper explanation, no apologies.
Naturally extremely pee'd off and I'm taking it as high as I can.
Can't say I blame you... Calls will no doubt be recorded too so can't see you having a problem proving they said you'd get the lower rate.

I think you were right when you said I was a victim of circumstance. Found out last night that a friend also has a loan with Santander. They borrowed less then I wanted but got the advertised rate. We earn roughly the same but they have numerous other outstanding debts. In face the loan was to pay some of them off!
 

FZR400RRSP

Banned
In face the loan was to pay some of them off!
That's a good point.
If you have outstanding debts and you say you're borrowing to consolidate debts, that can allegedly be looked upon more favourably.
Their 'reasoning' being that you're not adding to those debts with another one.
 

a l e x

Distinguished Member
That's a good point.
If you have outstanding debts and you say you're borrowing to consolidate debts, that can allegedly be looked upon more favourably.
Their 'reasoning' being that you're not adding to those debts with another one.
Sums up the daft logic they use really.

Would rather give someone a good rate to pay off debts rather than give someone with no debts the good rate.
 
D

Deleted member 13294

Guest
On the flip side, someone with debts but a good record of repayment is possibly a lower risk than someone with no debt and no track record of how well they will keep up repayments.
 

a l e x

Distinguished Member
On the flip side, someone with debts but a good record of repayment is possibly a lower risk than someone with no debt and no track record of how well they will keep up repayments.
Oh I agree with that. Before we got the mortgage the financial advisor bloke advised us re good credit. I've had cars, sofas etc on finance and pay the CC each month. Like I said, the credit scoring sites all put me as excellent. Never mind.
 

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