I wasn't offered the headline rate

Q I am currently looking for a loan to consolidate the debt I amassed while studying at university and living away from home. I applied for a British Gas loan - 5.9% annual percentage rate (APR) as advertised - and was told I had been successful. However, the APR I was actually offered was much higher.

Will the fact that the reason for my loan is debt consolidation be held against me? I am desperate to secure a low-interest loan but I am running out of ideas. Could you advise of the best deal available? I am 25 years old and have almost paid off my student loans.

JPH

A Like a number of other personal loan providers, British Gas quotes a "typical" APR in its advertising. This is the APR it will offer some borrowers (generally, employed people and preferably homeowners) but not all.

Somewhere in the small print you should find the phrase "APR subject to status", which basically means that once the lender has looked at your actual circumstances - your income, how much you can afford to repay, the relative security of your job, whether you're on the electoral register and your credit history - it will offer you an APR it feels is more applicable to you as a borrower. If it considers you less than ideal as a credit applicant, the APR you are offered will typically be higher than the advertised rate, so I wouldn't get too excited about advertised rates if I were you.

Your reason for needing the loan certainly shouldn't work against you - debt consolidation has been a popular use for personal loans for many years. But what is likely to work against you is not being on the electoral register, being unemployed or having a history of missed credit repayments.

Your best bet might be a graduate loan package. Your eligibility for one will depend on when you graduated and what type of degree you took, but loans are available for up to £25,000 in some circumstances. Abbey, for example, offers loans up to £10,000 at 7% for graduates who apply within three years of graduation, and the repayment term is up to eight years.