Rates on Consolidation Loan

D

DM1

Guest
Hi,

I work in lending, so I have some idea of how things work. My husband and I have applied for a consolidation loan. We were told the repayments and went ahead with application. We were approved, but when we got documentation, the rate is nearly 14%!!!!!

Also we were not given the total cost of credit figure, which in my job we are required by IFSRA to provide to the customer. Neither of us have bad credit.

Surely it isn't right to charge a rate this high? Do the financial regulations not have a max rate than can be charged on loans?

The only reason I would not go to another bank is that as we are fairly heavily committed I don't think we'd be approved, but we have never missed payments on anything.

Any advise appreciated.
 
DM1 said:
My husband and I have applied for a consolidation loan.
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Unsecured or secured?
We were told the repayments and went ahead with application.
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We're you given any other details other than the capital amount and the repayment amount? Did you not ask!?!
Also we were not given the total cost of credit figure, which in my job we are required by IFSRA to provide to the customer.
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You mean APR? What did you sign? Did you not get full terms & conditions?
Surely it isn't right to charge a rate this high? Do the financial regulations not have a max rate than can be charged on loans?
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They can charge up to 23% (I think) before they need to be registered as moneylenders.
The only reason I would not go to another bank is that as we are fairly heavily committed I don't think we'd be approved, but we have never missed payments on anything.
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Who is the lender? How much were you borrowing? Over what term? And what other loans/debts were you consolidating?
 
Hi Clubman, the loan is unsecured.

We were told the repayments were E545 over 5 years for 26k. The rate quoted was around 8% I think!?

As yet we haven't signed anything because I'm not happy at all with the rate.

As I said the CCA (loan agreement form) does not show the total amount to be repaid, and the cost of credit, which I find strange.

AND we were told in the documentation that we are actually approved for E35k. I know that lenders are no longer allowed to tell you what loan amount you are pre-approved for, unless you ask.

The lender is GE Money, and loan is to clear credit cards, and other small loans, but mainly credit cards.

I just find the whole thing a little odd, and am wondering are they outside the regulations on this. I have been looking at the IFSRA site, and the QFA site for more more info.
 
593.85 @ 13.17% variable (APR 13.99%) - thats a big difference. The quote including payment protection is 688.86 (which we did not ask for), and there is no place to sign on documentaion to say we DO NOT require the insurance. By law this is optional, and should be stated as so.
 

That's pricey alright. They say on their website "[FONT=Verdana,Geneva,Arial,Helvetica,sans-serif]A sliding scale of APR rates from 8.24% to 15.75% apply depending on individual applicant status. " I don't think they would need money lender status to charge these rates though - HFC bank charge rates of 29.5% on some of their finance options offered through the likes of Currys, DID etc. Check out alternatives such as the [broken link removed] underwritten by Friends First. You can apply online and get a decision in principle within one hour. I have no connection with Rabo or Friends First.
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Yes to be honest I am considering Rabo - the concept seems to be a bit strange rather like a credit card account, but the max rate they charge I think is 9.5%.

The only thing is they don't do joint accounts, so husband and myself would need to apply for 2 different credit a/cs.
 
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