A&L PPI Loan Advice Please

maforduk · 12 April 2006 at 10:04AM

I applied for a Loan with the Alliance & Leicester on Monday, recieved a phone call last night (Tuesday) and was going through in very particular detail my finances with their loans department for about an hour.
The rate I applied for was 6.1%apr. After giving all my details over the phone he came back with an apr of 11.5% and asked is that ok as I don't have any backup (i.e. cover if I don't work to pay the loan etc). I said that it was abit high and didn't want it if it was that high. He put me on hold and spoke to the underwriting department for about 5 to maybe 10 minutes, came back and offered me 8.1% and said that, that was the best they could do.

He's where it get's complicated...To take out the loan I had to take out Cover, effectively PPI incase something happened to me to cover the loan.
So with that in mind the payments are higher.

Here's my current situation:
My loan runs out in 2 years, my wife's in 3 years.
My loan has about £4000 left, paying £152 per month.
Wife's loan has about £1,300 left, paying £45 per month.
I also have a Credit Card with £2,600 and paying minimum of £60 per month.
Plus 2 overdrafts totalling £770.

The New loan is for £10,000 over 4 year's at the 8.1%. Paying back 289.08 per month.

Do you think I should stick with the new loan?

Instead of incurring early repayment charges for the loans, is there away of paying most of it off in a lump some, leaving a little bit on there and just pay the interest charge on that?

Should I be ABLE to cancel the cover on the new loan as it was a condition of getting accepted for the loan?

Thanks,
Mark.

maforduk · 12 April 2006 at 10:30AM

I have found PPI cover with an independent company for £4.22 per month. Does anyone know or have any experience with the Alliance & Leicester of cancelling the PPI and going with an independant company?

gingerfurball · 12 April 2006 at 10:42AM

I'm in the process of cancelling...letter sent yesterday. I'll let you know how I get on.

maforduk · 12 April 2006 at 10:45AM

Thanks, the forms should be with me on Thursday for signing and he was quite funny that he wanted them back as quickly as possible!
I said that I can post them the same day and that the forms will be with them on Saturday, Easter time!

maforduk · 12 April 2006 at 12:44PM

Went into the branch for other matters and quickly asked if she knew anything regarding loans. She said yes so I asked her if I could cancel the Payment Protection on mine as I was forced into it. She told me that I should not have been forced into it and should have been told that it was optional! I now have to wait until the documents come through so that I can ring head office and get them to send new ones out with no PPI on it.

Result, Thanks to the nice lady at the branch.

reepyrawley · 16 April 2006 at 9:39PM

maforduk wrote:

I have found PPI cover with an independent company for £4.22 per month. Does anyone know or have any experience with the Alliance & Leicester of cancelling the PPI and going with an independant company?

Good chance the cover is only for Death/Life, not necessarily for covering the payment if you are off work due to illness/accident etc.

Under FSA rules since January '05, a lender/insurer has to ensure there is a need for the insurance before it can be recommended. In most cases, this may only be one part of the cover eg Death or Critical Illness.

Also they may try to infer that by taking the insurance you stand a better chance of getting the loan, not necessarily so, if you have savings/investments with a lender (not necessarily high value) then they may regard you as less of a risk anyway so for an adviser to suggest that is more often than not, incorrect, esp. if your credit rating is ok.

I should know, I'm one of the monsters that sells the bloomin' product for a large High Street bank!

shazzer22 · 16 April 2006 at 10:47PM

I too had the 'hard sale' for PPI on a recent loan application i did through moneyback loans (a&l) but once i'd spent 28 mins on the phone going through every tiny detail of my finances, and me flatly refusing PPI, they came up with a 8.9% on £4500! I told them that I'd need to think about it and to send through the paperwork, can't believe their cheek on the phone, I nearly told them where to shove it! (but that wouldnt help me get a car would it?!)

Neoswitch · 19 April 2006 at 10:38AM

am I right in thinking you took out an Alliance & Leicester Personal Loan and not a Moneyback Bank Personal Loan?

maforduk · 19 April 2006 at 2:24PM

That's correct.

A&L PPI Loan Advice Please

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