Help, Personal Loan Refused. Can't Buy Lexus Is200

[smartwave]

Hi All

I told you that I booked one Lexus is200 in Shieffield and would get it on Saturday.

However, this morning, the finance company told me my loan (with APR 7% ) has been refused. Instead, they offered me a loan with APR 38%!!!!!!!

Comparing to the monthly repayment of 175 pounds with APR 7%, this 38% APR loan has a monthly repayment of 217!!!!!! (5000 pounds, 36 month)

Can't understand why my application was refused. Also tried to get loan from Natwest, which I am banking with, failed again.

sigh.

Have to say good-bye to the lexus.

[MartinC]

38% :o what the hell is that about, even yes-car-credit aren't that rediculous.

Have you got something registered agianst your house from someone that lived there??

is there any way you can secure the loan against the car??, mind you the Lexus finance, if thats who it was would have doen that....hmmmm

[MacRS200]

Regitster HERE and you can get your credit history.

Anything not related to you can be challenged

[star a]

Hi All

I told you that I booked one Lexus is200 in Shieffield and would get it on Saturday.

However, this morning, the finance company told me my loan (with APR 7% ) has been refused.  Instead, they offered me a loan with APR 38%!!!!!!!

Comparing to the monthly repayment of 175 pounds with APR 7%, this 38% APR loan has a monthly repayment of 217!!!!!!  (5000 pounds, 36 month)

Can't understand why my application was refused.  Also tried to get loan from Natwest, which I am banking with, failed again.

sigh.

Have to say good-bye to the lexus.

←

may be worth getting in touch with experian to find out why your credit rating is what it is...perhaps you have no 'borrowing' history, or the address is associated with a bad debt,

but do not be tempted to go for high apr borrowing, it's really really not worth it, how a loan company can be allowed to lend at 38% is disgracefull!!

good luck

[smartwave]

I believe I have a good income.

The problem is, I am a new immigrant of this country. I come here in Sept 2003. And the house I am living, I believe, has a very very bad history.

If I move out tomorrow and re-apply next Monday, can this help me?

[smartwave]

if I have a face to face talk with my bank manager, natwest, can I get the loan?

I am almost sure that the loan was refused due to my address....

The previous occupier has loads of out-standing loans........

[MacRS200]

Answer is no I'm afraid.

No credit history is worse than a bad one. As far as they look you do not exist.

Who do you bank with and do you have a record of regular payments into your account? If they won't lend to you no one will.

Sorry try your bank.

Edited September 14, 2005 by MacRS200

[Bazza]

will depend on where you have immigrated from

your house/area history will have a big effect on wether you are considered a low or high risk

and unless you can show/proove you have a good history without any outstanding or bad payments you havent got much hope

sorry

[smartwave]

I have a credit with my bank, natwest. and I use it almost every week and pay back on time.

Is this a credit history?

thank you for your advice!

[javadude]

Moving won't help - you have to give details of previous addresses.

[Mr Morse]

Baby Shake (Mrs M) had the same problem when she came to the UK - the fact that she didn't exist on anyone's credit records, whether good or bad. Eventually she was able to open a bank account with Nationwide (where I also have an account & a mortgage). Might be worth trying them?

[Swifty2005uk]

You will also be refused credit if you are not on the electoral register,the more times you apply for credit and are refused,your credit history will become worse as it is all recorded onto your personal file wether you are given the loan or not.

[GALLA_4]

FIAT PUNTO?

[Damer]

Had similar problems in the past. I had a flat in teh north east I used to rent out. Because the managing agent never sent through the water rates I ended up with a CCJ, that only came to light when I was buying another house a few years later. After getting my credit file from Equifax also found out tenants had been using my name and iterations of it and of previous tenants to apply for credit, all ended up being linked to me. Result was couldn't get mortgage until sorted.

Had to discharge CCJ, get it stamped by the court, Get Equifax to remove all no related people removed from your file.

This reared its head again when I tried to buy my first IS. Bank wouldn't lend to me. Ended up going through Lexus Finance, were brilliant, really understanding. A hassle proving everything was discharged, getting copies of all the paperwork etc, but a week later I had my IS :D

[smartwave]

Damer

Can I get a loan from Lexus to buy a is200 from an independent dealer?

thanks!

[Damer]

Damer

Can I get a loan from Lexus to buy a is200 from an independent dealer?

thanks!

←

Doubt it but don't know. My dealership (Stockport) were very helpful, 'spose they wanted the sale as much as I wanted the car.

[dealer-man]

Hello Smartwave

Sorry to hear about your current situation - you are not the first and will not be the last so do not worry!

Firstly, the figures you have quoted don't seem to add up quite right - £5000 over 36 month @ £175/month works out at 8.6% flat which equates to something like 17% APR (this is a very rough calculation) NOT the 7% APR you had been quoted. The 38% APR which you have been offered - which works out to be 18.7% flat is actually around 10% per year extra - so over 3 years you have to expect to pay 30% extra in interest - or put it another way another £1500... not a small amount.

One poster has remarked that this is a disgrace and finance companies should not be allowed to do this. Whilst I do agree it is higher than would be ideal you present a very big risk to the finance companies - they are NOT trying to con you!

At the moment you have spent 2 years in this country and effectively do not exist!! Finance companies can not check your bank accounts to see what your finances look like (contary to what some people think) so have to see if you have been loaned any money before - such as a credit card, mortgage, personal loan etc. Then they need to decide whether they could trace you if you stop paying. If you currently rent and are not on the electoral role (which is a sign that you do not stay in the same place for long) then in their eyes you could stop paying and never be found again!!

It sounds harsh I know - but something like 1 in 4 people fail to pay their loans back properly. So what should you do? By all means check with Experian as to whether there is any bad history at the address you are living at (I would be surprised if this is the case mind you) - do NOT pay anyone to send you your credit score as such a thing does not exist - the methods of scoring very from lender to lender. If you can afford the loan and really want the car then go with it - you may have to take some pain for a while to prove you are a good payer.

I have come accross APR's higher than this! It may be worth trying other specialist lenders you here about on TV etc. who may view the risk slightly differently.

By the way, Lexus finance will not do loans as high as the one you have been offered, who is it with? You are allowed to contact the finance company yourself and they will tell you the reason why the rate has been set so high - your dealer will not have been given such information so they cannot always help.

Keep us informed

[Kent]

"Firstly, the figures you have quoted don't seem to add up quite right - £5000 over 36 month @ £175/month works out at 8.6% flat which equates to something like 17% APR (this is a very rough calculation) NOT the 7% APR you had been quoted."

I think that the monthly repayment figure includes insurance. Some lenders include this automatically and then hide your rights in the small print..

[Card_Advisor]

As a VP at MasterCard, I would like to clarify some of the issues raised.

Fisrtly, historic bad credit at your address does not affect your own access to credit. Indeed, neither does the credit history of those living with you unless there is an established financial dependencyand/or relationship. Finance providers certainly do not instantly decline applications from those with no credit history or electoral roll registration find - these are merely attributes of the decision based upon applying an application score (using a mathematical model known as a scorecard) and/or using a credit bureau score, often together in what is known as a matrix score. The dfference between the two is that a bureau score also includes attributes based upon historical repayment of other credit, the number of credit searches made in a 12 month period etc

I do not know where the default rate of 1 in 4 comes from, but let me assure you this is certainly not the case. Delinquency rates on credit cards and personal loans are about 4%, for car loans about 8% - but the latter includes a high element of non-standard lending, commonly known as 'sub prime'.

One of the reasons for higher delinquency on car loans is due to easier acceptance on the basis that car loans (ie HP as opposed to personal loans) are secured on the car. This is certainly the route someone with less than perfect credit history should follow, in addition to offering to pay a sizeable depost. An alterntive is to provife a guarantor, who legally would be responsible for settlement in the event you default on the loan.

My advice would be ask the finance company why they declined your application - not merly the standard 'based upon credit scoring' but asking for the actual decline code - a code generated for every declinined application, ie the actual reason, based upon bureau information.

[smartwave]

Many thanks to Card Advisor

I have contacted my bank manager. He told me that I was using my student step account which has no credit and could not be used to get loan.

I have got a current account and my salary will go to this account from now on. In three month time, possibly, I can get loan.

This information may help those foreigners who come to UK to study and transfer to working status in the following year to get finance: when you have a job, stop using your student step account immediately and get one crrent account!

I finaly got the car because my friends borrowed some money to me.

It drives superb. I like it.