Loan Advice

[JoyousMondays]

I’ve been approved for a loan, above the APR that was advertised but I didn’t read the small print and the APR advertised was for existing customers only.

My credit rating is good 950+.

My question is do I shop around for a better rate? Won’t that affect my credit rating? Also, if they can see I’ve had lots of further credit searches, can they retract the offer?

Anyone?

Anyone out there? Do I look for a better rate or is it better not to have lots of credit searches on your file?

If you shop around u may get a high Apr anyway as not everyone gets the advertised Apr.

If you do multiple searches you could look desperate for credit and could end up being turned down.

I woukd look at affordablity rather than focus on the overall Apr

The monthly payments I’ve been offered are easily affordable. I could also overpay but the interest is front loaded and you’re able to pay off the loan early with 2 months interest added on. Not sure whether to go for it or gamble.

That isn't something anyone apart from yourself can know really.
Think about what you are borrowing for and is there any cheaper ways to borrow such as an interest free credit card etc

What rate have you been offered?

The 'effect on credit rating' is massively overstating in my experience. Probably if you applied for 10 loans at the same time it might have an effect, but a couple, probably not.

A few years ago, I applied to Sainsburys for a loan to top up the money we had saved to pay for an extension. The rate offered was far higher than the best rate, so I didn't take the loan and applied to Santander, my own bank and got a rate that was very close to the best rate that I didn't qualify for with Sainsburys.

Go onto moneysavingexpert (sorry can’t link). You can do a soft search for loans which doesn’t affect your credit rating and shows you the probability of being accepted for different loans, their interest rates etc.

It’s a really good tool.

You can also do a soft search for loans on clearscore and moneysupermarket.

In my experience, the impact on credit rating is vastly exaggerated. If you applied for ten loans at once, it's likely to have an impact, but if you only apply for a handful, it's unlikely. Just remember to keep track of your credit report. I found information at Fit My Money website that this is very important. Errors in credit reports usually refer to delinquencies or defaults. So you better check it for errors today to get and challenge your credit rating on time. You need to understand how to avoid common mistakes when checking a report.