Can you decline a car loan rate?

[sat1983]

I've never applied for car finance before but today I thought I'd apply for a smallish loan- £7,500 through Natwest. It stated that it would be 3.4% APR ( I do realise rates depend on individual circs) but by the end of the application it stated it would be 14.9% APR!!!!!

What annoys me (is this standard?) that I had to go through the whole application before it stated my loan offer rate would nee 14.9% APR, that they would need to do further checks and get back to me within 5 days..

I don't want that rate- will it have affected my credit rating in any way saying I don't want this loan?

[IanCress]

I would imagine it would leave evidence of a search on your file. Generally it's not a problem, unless you rack up loads of them within a short space of time.

Before you go applying again, it may be worth looking in to why they wouldn't give you a decent rate. Chances are other lenders will do the same.

[Dr Interceptor]

It would have been 3.4% if you met all their desired criteria.

Have you looked at your credit report on Experian?

[sat1983]

average rather than excellent! I don't borrow much!

[Presuming Ed]

As I understand it, they can advertise the headline rate as long as a minimum 50% of applicants qualify. I would look into your credit history as there must be something on there to suggest you would be a higher risk.

[HJMS123]

sat1983 said:

average rather than excellent! I don't borrow much!

They seem to like people who have med-high incomes and a strong history of borrowing ... especially finances/loans which have already been settled.

It sounds obvious but people assume because they earn a decent wage or live comfortably they'll be the perfect candidate for credit but that's not normally the case. They tend to be more interested in your history of paying credit/finance so if that's not something you have a lot of they'll tend to be cautious.

[Fast Bug]

Presuming Ed said:

As I understand it, they can advertise the headline rate as long as a minimum 50% of applicants qualify. I would look into your credit history as there must be something on there to suggest you would be a higher risk.

This. Finance companies/banks can't advertise a headline rate that only a small proportion of customers can get. Check your Equifax and see if anything shows up, if you've had little or no credit in the past than it could be that. It's easy to get credit at a 'good' rate if you had/have lots of credit.

[sat1983]

HJMS123 said:

They seem to like people who have med-high incomes and a strong history of borrowing ... especially finances/loans which have already been settled.

It sounds obvious but people assume because they earn a decent wage or live comfortably they'll be the perfect candidate for credit but that's not normally the case. They tend to be more interested in your history of paying credit/finance so if that's not something you have a lot of they'll tend to be cautious.

I have fully paid off one loan last year- paid on time and in full! Saying that it is the one!

[HJMS123]

sat1983 said:

I have fully paid off one loan last year- paid on time and in full! Saying that it is the one!

It sucks big time! I had the exact same issue when I first applied for a car loan about 5 years ago ... I was 19 earning 25k+ living at home with no outgoings and trying to get a loan under 15% APR was impossible! In the end a family member lent me the money so I could take out the loan and pay it off to help get something worthwhile on my credit file as direct debits for small bills etc count for nothing in the grand scheme of things!

Sign up to Clear Score to get an idea of your rating then use tips provided online to help strengthen it is all I can recommend.

[Dr Interceptor]

Agree having a using credit will boost your score quite quickly. If you have a credit card, rather than keep them empty, pay for everything on them, then pay it all off each month. Using and managing your credit counts for more than being constantly in the black.

[SteveSteveson]

The loan rate advertised has to be what the majority get. For some reason you don't meet what they want. You can reject it. One search will make no difference to your credit rating. Where they start to get worried is where you have several searches as that points to either 1) you are about to take out a load of credit that is not appearing on the report yet or 2) lots of other companies have declined you. Both of these things worry loan companies, but they are more likely to cause a referral to underwrites for a human to look at rather than a flat decline.

Check your credit score. There are lots of things that effect it.

[Yipper]

It sounds like you may have a bad credit rating or profile. That is a very high rate to get offered.

Read this and do the 27 steps. They will get you down toward the 4% level, but may take 6 to 18 months to get there:

http://www.moneysavingexpert.com/loans/credit-rati...

And you can check what loan-rate % you might get *before* applying (without leaving a stamp on your credit record) by following this soft-search process:

https://www.moneysavingexpert.com/eligibility/

[clockworks]

I had a 3% loan offer displayed on my Lloyds internet banking page, after I had logged in, not on the sign in page. I assumed that it was targetted at me specifically, but it wasn't. After completing the application, the rate went up to 8%.
No sign of the word "from", or any other disclaimer.

I went with Tesco at 3%, money was in my account less than a week after applying.

[Alucidnation]

clockworks said:

I had a 3% loan offer displayed on my Lloyds internet banking page, after I had logged in, not on the sign in page. I assumed that it was targetted at me specifically, but it wasn't. After completing the application, the rate went up to 8%.
No sign of the word "from", or any other disclaimer.

Same.

[sat1983]

Yipper said:

It sounds like you may have a bad credit rating or profile. That is a very high rate to get offered.

Read this and do the 27 steps. They will get you down toward the 4% level, but may take 6 to 18 months to get there:

http://www.moneysavingexpert.com/loans/credit-rati...

And you can check what loan-rate % you might get *before* applying (without leaving a stamp on your credit record) by following this soft-search process:

https://www.moneysavingexpert.com/eligibility/

Did that- said 70% chance with 3 lenders, one being natwest. Said 3.4% APR but ended with 14% which is just silly!!

[rfoster]

1 or 2 searches aren't going to adversely affect your credit rating. The problem with these online offers is that they don't show you what criteria is required in order to benefit from the best rates - and of course any quoted rates are subject to underwriting approval. Some banks will offer a better rate for their own customers than to the remaining public, or better rates if you own your home and so on.

You certainly don't have to accept it (not do they have to offer you the best rate quoted.)

[ymwoods]

Dr Interceptor said:

Agree having a using credit will boost your score quite quickly. If you have a credit card, rather than keep them empty, pay for everything on them, then pay it all off each month. Using and managing your credit counts for more than being constantly in the black.

Thats one thing ive learnt very recently! I used to have a few credit cards and was constantly juggling loans and all sorts about. Now im lucky enough to be in the position to not need any credit so I closed/payed off all my accounts...only for my score to go down as now I dont have any credit cards!