If you want to get ahead in the modern world you need a sound foundation in business and finance.
That's where we come in at CMT Corp. We give you the answers to the business questions that you didn't even know you had. Together we will achieve all our financial goals.

Sincerely yours,
CMT Team

Never expect to get the best loan deals

Think you’re eligible for a discount deal? The bank may use your credit score as a reason to reject you

Lenders are offering record-low interest on personal loans and credit cards, but many borrowers are paying more than double the rates promised, according to research.

The average rate on advertised personal loans is 3.5 per cent, but Bank of England data shows that the actual interest rate consumers are offered is closer to 7 per cent, says Scott Corfe, the director at the Centre for Economics and Business Research (CEBR), which published the findings in conjunction with Nava Loans.

“If you look at what is advertised on the websites of the high street banks they are at odds with what we are seeing in households. It is quite stark,” he says.

The rate on personal loans has fallen below 3 per cent for the first time. TSB is charging 2.8 per cent on a £7,500 loan repaid over five years, while Sainsbury’s Bank offers 2.9 per cent interest on loans of between £7,500 to £20,000 over three years. M&S Bank charges 3 per cent for a five-year loan of £7,500, according to Moneyfacts, a consumer finance website.

Legally, advertised interest rates only have to be offered to 51 per cent of successful applicants. The cost of borrowing can vary dramatically and the prominently displayed rates are for specific loan sizes and durations.

The CEBR’s research suggests that it is not only people with poor credit histories who miss out on the best rates. A large middle ground of 14 million people who have “imperfect” credit scores are also being turned down.

“Many people want to take out credit at these rates, but they are rejected, or in many instances they are getting unfavourable rates,” says Mr Corfe.

A change of address, or a lack of borrowing history can leave you stuck with a poor deal on credit.

“A lot of people don’t understand credit ratings. You could have a perfectly good income and have moved home a couple of times and the fact that you have changed your address can tarnish your rating,” he says.

To get the best rates, people need to have a “glossy” credit rating, says Rachel Springall of Moneyfacts.

“Anyone considering a loan would be wise to run a credit report, such as with Experian or Equifax, to see what credit score they have. Keeping up with repayments on any debts should be the number one priority, because missing payments can damage your score,” she says.

Borrowing by British households has accelerated in the past few years and families are taking on credit card debt at the fastest rate since the financial crisis.

About £600 million was taken out on credit cards in February, the greatest monthly increase for 11 years, sparking concerns about overspending.

This week the Bank of England ordered a review into whether banks have allowed their lending criteria to become too loose.