Sainsburys loan refusal - never been declined for finance

[Rick_1138]

Hi folks.

I am in the process of buying a new (second hand) car.

I have paid off the outstanding balance on a loan i had for my old car (loan through tesco).

The woman at tesco told me i cant apply for another loan through tesco for 8 days as it shows on their system as me having 2 loans through them. However she told me after i had paid that i could have extended my current loan...ah well.

As i have a deposit on the car to hold it i looked at other lenders.

I have had 3 main loans in my life, all from either RBS or Tesco, never been declined, never missed a payment and all was well (first was for £2k over 3 years, then a bike finance of £4k over 3 years, a tesco loan of £7k over 3 years, which i paid off today a year early)

So i looked at poss lenders and sainsburys were offering the same rate as tesco.

So i went through the app process, all seemed fine until i pressed submit, i got a technical fault page, saying nothing had been submitted or saved etc.

So i re-did the application on my main PC just incase was the ipad, it went in fine and was pretty much instantly declined.

The loan is for £13k over 4 years for a car and a small amount of debt clearance (£2k), i earn 31kpa and have 1 other loan (6k over 3 years 0% currently sitting at £4kish) and have 4k in credit cards which will be cleared from this loan.

I have no other major dependancies or outgoings, bar a small rent (still with parents but moving out next month or so but pay rent to them and looking to pay the same in new house with GF so outgoings wont change)

I am 30, will be 31 in june.

What i am worried about is i have read online that sainsbugs are bad for declining loans with folk with good credit, i checked and mine is good on 2 sites such as equifax. I am hesitant to apply again with say RBS or M&S incase i mess up my credit risk rating, or if sainsburys website may have tried to log 2 attempts to apply with the tech issue.

1 thought i had was to phone my banks loan dept and enquire about possiility of a £12-13k loan in my circumstances and see if they would take that risk or if the amount is the main stumbling block.

Can anyone tell me if a £12-13k loan in my situation is unusual, its for a car predominantly.

many thanks folks

[martin mrt]

Lenders are a funny bunch, I have been refused a loan in the past for 6k with a lender than approved 20k car finance only a month later with the same circumstances. Go figure.

I'd check your reports, see how many times it was searched by sainsburys and take it from there.

[anonymous-user]

Have you looked at Barclays?, 5.1% at the moment.. Not sure if being declined interferes with ratings though..

[Rick_1138]

The main gist of the issue is i am looking at replacing my Audi, my old man is buying it as his car was written off in a smash, he is giving me £6k for my car which is very good (he retired and has some cash to burn!)

Anyway i have paid off the outstanding loan leaving £2600 roughly.

I had placed a £100 deposit down on a car at a local dealer with understanding i have to apply for a loan and clear the outstanding loan amount as i dont want 2 loan agreements.

Tesco said that i couldnt apply for a new loan with them for 7 days, this obviously could cause an issue with the dealer as they would want the car out the door by Monday coming.

So i tried another lender and got to the situation i am i now.

I am terrified of applying for a loan again incase it ruins my rating, which is good at the mo.

I am going to call my bank today and see about asking them if borrowing say £10k with my income and outgoings and see if there criteria would accept me, the guy on the phone last night said this isnt a formal application but the will have criteria they can give me an idea on etc.

Hopefully this will help. The rate is higher, about 6.4 instead of 5.1 (works out about £10 a month dearer) but my bank may be more willing to lend.

I looked for advice on money saving expert....i wont ever do that again, a bigger bunch of preachy, self satisfied prats i will never meet again!

[bigbubba]

martin mrt said:

Lenders are a funny bunch, I have been refused a loan in the past for 6k with a lender than approved 20k car finance only a month later with the same circumstances. Go figure.

The loan was unsecured, the car finance wasn't.

[Rick_1138]

I am now getting e-mails from sainsburys stating they are sorry i wasnt accepted blah blah, but if you go to freedom finance our partner there are options....sigh

Nationwide apparently do a quote for you which doesnt class as applying on credit scores, so may try that to se what rate i may be offered if iam accepted etc, also looking to phone my bank RBS to see if they can advise on what my loan acceptance may be with my income, outgoing etc, without actually applying.

I am looking at about 10K over 4 years.

[Newc]

Give Zopa a call. They say that an application there doesn't impact your credit score; I am not sure how that works but I'm sure they'll explain it to you.

[Rick_1138]

I have heard about Zopa on the MSE website, but tbh i was getting a bit shirty with that forum as basically i was getting the impression that if i had taken out credit cards and a bike loan i was the stupidest man alive asking for more debt, even though i had just reduced my card debt by 3k and paid off a loan.

Is Zopa a realistic finance plafce or is it a bit...wonga?

[Odie]

Rick_1138 said:

I am now getting e-mails from sainsburys stating they are sorry i wasnt accepted blah blah, but if you go to freedom finance our partner there are options....sigh

Nationwide apparently do a quote for you which doesnt class as applying on credit scores, so may try that to se what rate i may be offered if iam accepted etc, also looking to phone my bank RBS to see if they can advise on what my loan acceptance may be with my income, outgoing etc, without actually applying.

I am looking at about 10K over 4 years.

Nationwide are very very good, ive had a couple of loans with them and ended up moving all my banking to them as I had such a good experience with them. Plus they are a building society not a bank.

[Rick_1138]

Using the nationwide loan quote thing, which was very detailed and asked a lot about credit cards, exisiting loans etc, which i put in as accurately as i could.

Got a quote for £11k over 4 years at 11.9%apr. A lot higher than the advertised rates from Sainsburys, tesco and M&S but at least it would get me the loan and not cost me heaps more than i was expecting.

This would allow me to clear most of my debt and start on road to saving for a mortgage.

However i am worried about applying again incase i am declined after this quote as it may not be seeing something on my credit history.

Though looking at my report of past history i have no bad payments or missed payments, the only issue is i have credit card debt of £6.5k though that will be £4k after recent payments show up on finance history etc.

[scottri]

Just a side note here but have you considered the implications of having 15k in personal loans on the amount you can borrow for a mortgage?

[Newc]

Rick_1138 said:

I have heard about Zopa on the MSE website, but tbh i was getting a bit shirty with that forum as basically i was getting the impression that if i had taken out credit cards and a bike loan i was the stupidest man alive asking for more debt, even though i had just reduced my card debt by 3k and paid off a loan.

Is Zopa a realistic finance plafce or is it a bit...wonga?

Zopa is not at all Wongaish. They hook up savers and borrowers directly. Rates are usually lower than the banks. Certainly worth giving them a call.

[RSoovy4]

You know everyone is screaming at the bankers for reckless lending?

Well........

[Rick_1138]

scottri said:

Just a side note here but have you considered the implications of having 15k in personal loans on the amount you can borrow for a mortgage?

Yes i have, i felt it was better having 1 main loan rather than debt on cards.

Also i wont be looking to apply for a mortgage for about 2 years, so the bike loan will be finished (its a 0% 3 year affair, 2 years left), my cards will be cleared so the only major outgoing bar rent will be this loan if approved which will have 2 years outstanding when i am looking to get a mortgage.

Its not like i am looking to apply for a mortgage in 6 months. The plan has always been to reduce debt to 1 major outgoing, around £250 a month, which i have been paying comfortably for the last 3 years with last loan.

regarding Soovy, its a fair point about reckless lending but i am being sensible, tking the minimum i need over a shorter time, i.e. not 60 months, and i have paid off other loans before applying for this, i am not piling debt onto debt.

[scottri]

Rick_1138 said:

Yes i have, i felt it was better having 1 main loan rather than debt on cards.

Also i wont be looking to apply for a mortgage for about 2 years, so the bike loan will be finished (its a 0% 3 year affair, 2 years left), my cards will be cleared so the only major outgoing bar rent will be this loan if approved which will have 2 years outstanding when i am looking to get a mortgage.

Its not like i am looking to apply for a mortgage in 6 months. The plan has always been to reduce debt to 1 major outgoing, around £250 a month, which i have been paying comfortably for the last 3 years with last loan.

regarding Soovy, its a fair point about reckless lending but i am being sensible, tking the minimum i need over a shorter time, i.e. not 60 months, and i have paid off other loans before applying for this, i am not piling debt onto debt.

Fair do's. It wasn't the type of debt I was commenting about, it was the reduced amount the mortgage lenders would loan you, and whether that would be enough to buy the house you want. For me, I needed every last penny the bank would lend me to get my first place and if i'd had any debt it would have significantly reduced the amount they would consider lending me and therefore my ability to get what I wanted.

Sorry if you have considered this!

[anonymous-user]

You are asking to be able to borrow in total more than half of your annual income unsecured (Nearly 2/3rd net income). You have no tangible assets that a lender can see, the money after you've got it could be spent on a holiday or down at the casino. I'm not surprised that in the current climate you have been turned down or put on a higher rate. Your risk profile isn't great. If you lose your job how you would be able to pay the loan back?

[Alex]

With a £4k outstanding loan and £4k on creditcards earning £31k many lenders will score you as fully committed.

If I was you, I would buy a £2k car instead.

[bigandclever]

Why don't you just wait a week and go back to Tesco? Obviously having explained the situation to the garage.

[Rick_1138]

I called my bank and they couldnt have been more helpful.

They went through all my outgoings, income, debits, rent. much more thorough than Sainsburys application, which tbh, was very sketchy.

I got a higher rate than the tesco or M&S, but its not mental, still less than i was looking at for £13k over 4 years originally. I went for the minimum i needed and am happy with that.

I have £1k coming from ebay sales in next 2 days, and an old prelude to sell for about £600 so that will clear another good £1500 of my credit cards so shall take me down to about £3k.

So my current debt by start of next week will be 11K loan, 4k bike loan and 3k cards, so 18k in total, but this means i have light at the end of the credit card tunnel i have had like a chain round my neck since 2006 (wish i had never got the bloody things, even though they are 0%) will cut up cards as they are cleared and reduce limit to about 2k as an emergency card.

Then can start putting away cash towards mortgage in 2 years, along with the mrs saved funds we shall hopefully have about £12k in a year and a half. hopefully this will help towards mortgage approval.

[brissleboy]

Alex said:

With a £4k outstanding loan and £4k on creditcards earning £31k many lenders will score you as fully committed.

If I was you, I would buy a £2k car instead.

This.

Honestly, I've been there, pay down your old debt first, then worry about a better/newer car, £18k of unsecured debt is a lot in anyone's eyes. Save for a deposit for a house but don't think for one second it stops there, you may need to have work done (that all costs money) and you will want nice things to put in there... that is more of a priority than a car.

Think carefully before you commit, that is just my 2p's worth though.