Northern Rock Fantasy Loan

beelzebubs · 14 April 2005 at 3:05PM

I have just got off the telephone to Northern Rock. I applied for a £7000 loan over 2 years. After all the questions to get my personnal and financial details I was told that I had been accepted for this loan at 5.7% with 24 payments of £343.02.
I then asked if this included Personal Payment Protection to which they confirmed it did, so I asked for it to be taken off as it totalled £34.06 per month (https://www.freeinsuranceuk.com offers £19.43 per month, saving me £351.12 over the term of the loan). I was then told that my loan had not been accepted and I would have to wait for an 'Underwriter' to contact me within the next few days.
I left it 2 hours and then telephoned them again to get an update...I was told that my application has been refused and they didn't have to tell me why. Strange that isn't it...... I highly recommend that everyone ignore their low interest rate as it is a load of tosh.

Has this happened to anyone else?

I am going to stick with Britannia at 6.7% totalling £311.98 per month (1% more but only £3 per month more. How does that work?)

Jamidge · 14 April 2005 at 10:51PM

i did apply for a northern rock loan today without payment protection and was cleanly refused...though my rating is good......

probally the same story for other lenders too that off a low rate on this loan compare'er

http://www.uswitch.com/Loans/Comparing-Loans.html

applied at my bank and got a first time yes without PP

JAMIDGE

Autonomous · 16 April 2005 at 4:17AM

I applied online, i then called them to complete the application. I selected NO to PPI online, and had to confirm that to the sales person. I was accepted, and the paperwork was sent though to me, I checked though it, guess what, there it was PPI included on the agreement, i phoned them up, and asked that it be removed. They confirmed it had been removed, and that i should have the new credit agreement soon. I have since received a mail, stating that my application has again been accepted. So hopefully!

It does state quite clearly on the reverse of the credit agreement 6(e) "Taking out insurance is not a requirement of taking out the loan with Nothern Rock plc"

This sort of behavious should be illegal, they cant force you to take insurance, and if you have been accepted, you have been accepted whether you have insurance or not.

Good luck guys, have you tried The AA or Direct Line, both at 5.9% ?

beelzebubs · 18 April 2005 at 10:12AM

Just a quick update.

I applied for a barclaycard loan at 5.7% without Payment Protection and they have accepted my application immediately.

Therefore, this must be the best loan on the market at the moment. Unless anyone else knows of a better rate?

bh1 · 4 May 2005 at 10:50AM

My wife applied for a NR loan at 5.7%... she refused PPI and was then offered a rate of 12.9% !!! Surely they are having a laugh...

She has a well paid public-sector job, good credit history (has had loans before, credit cards and always paid on time), is a property owner and is on the electoral register. So if she can't get 5.7%, who are the 2/3rds of people who are getting the 'typical' rate?

Martin - maybe it would be worth asking Northern Rock (seeing as you provide an affiliate link to them) what proportion of the 'typical' rate payers have taken out PPI, and what is the average rate offered to those who refuse PPI?

Would discrimination based on the purchasing of PPI be illegal?

Cheers
bh.

hilstep2000 · 4 May 2005 at 6:36PM

I applied online, and today I got the credit agreement to sign. I refused PPI, although they sent me a letter with the agreement advising me that in my circumstances I should take it out, but I still won't.
The payment terms are £5000 over 5 years, monthly £95.72.
I'm sending it back tomorrow, I hope the money will go in my account soon!
(By the way, I have a Northern Rock Mortgage, maybe that had something to do with it!)

MarkyMarkD · 4 May 2005 at 11:00PM

I don't believe it's illegal to accept/reject customers on a differential basis based on whether they purchase/don't purchase PPI.

Bear in mind that a customer with PPI is a far safer loan for the company to make. If you are in any way a marginal case, they are far surer of getting paid if you purchase PPI than if you do not. So any sensible lender WOULD have a lower credit score accept limit for those who purchase PPI.

That said, I didn't know anyone actually did this so blatantly. Somehow it doesn't surprise me that Northern Rock are up for this sort of thing.

MoneyMachine_2 · 5 May 2005 at 12:54AM

Is it possible to take out this loan with the PPI and once you have the money in your account - cancel the PPI?
This would eliminate any ability to discriminate based on PPI uptake.
Should be no reason I can think of why you wouldnt be able to cancel it.

Xbigman · 5 May 2005 at 2:07PM

They would have one of two responces (in some cases both).

1. Cancel the PPI and they cancel the loan. You have spent the money so they helfully lend you the exact same amount at a higher APR.

2. They lent you the money for the PPI up front and cancelling only gets a partial rebate. You can lose thousands this way. At least one lender will send you this money as a rebate so your loan is still higher than it needs to be. Then when you try to pay the rebate off the loan, you get an early repayment charge, and they got you twice.
Regards

X

MoneyMachine_2 · 5 May 2005 at 3:01PM

Northern Rocks APR is dependent upon your credit score so it shouldnt theoretically change. However - when I asked their customer service department about cancelling PPI they told me the loan would have to be re-scheduled and without PPI the APR might change/may change.
Seems contradictory but thats what they said.
Their loans are all still front loaded aswell so if you do re-shedule the loan then it may be costly as the first payment would have been made up of a lot of interest.
Sounds like they couldnt be trusted if you cancelled the PPI so best just find out what rate they offer you without it. I have never ever taken PPI on any loan but cant say I've suffered from higher rates as a result - always got the best advertised rate. Suppose it depends on the lender.

frepol · 5 May 2005 at 5:52PM

If you are in any way a marginal case, they are far surer of getting paid if you purchase PPI than if you do not. So any sensible lender WOULD have a lower credit score accept limit for those who purchase PPI.

All well and good but why should you pay for something that won't pay out anyway? In effect, it's almost like the PPI is an acceptance fee for a lower APR which is rendered worthless because of the cost of the PPI.

Northern Rock Fantasy Loan

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