Cahoot Hike Interest Rate Up On Existing Loan

Herb

Hi

I have had a Cahoot Flexi loan at 5.8% which was agreed in April 04 and I drew upon it in Nov 2004.

I have just had an email to say that the 'promotional rate of 5.8% has finished' The rate is now 8.5%.

I am pretty good at reading small print and I can not remember the words 'Promotional period'.

Yes i knew it is variable - but I would expect it to go up and down broadly in line with base rate.

And I certainly wouldn't expect to be offerred a rate 1.5% over their current typical rate for a Flexible Loan.

The Credit Agreement makes no mention at all of a promotional period - has anybody tried to fight this with Cahoot?

I am getting no where at the moment.

piesporterh

Hi, i have just had an email to say the same thing and, like you thought it was fixed for the duration i requested. I am panicking now and it means my payments will go up by approx £25 per month.

Bugbird

I got the email as well, I am going to let them know I will be moving the loan and see what they say. Anyone got any tips for another loan company with low interest and no early settlement penalty.
Bugbird

jonesMUFCforever

A flexible loan is not the same as a Personal Loan.
To me a flex loan just lets you draw down a multiple of your monthly repayments and as long as your monthly repayments cover interest and charges Cahoot will be quite happy.
A personal loan (under £25k) on the other hand is governed by the Consumer credit act and once an agreement is signed is binding on both parties ie neither can increase interest charged or fixed monthly repayment.

monkeysnail

Same thing happened to me. By the way, do you remember if they asked for your payslip when you applied for the flexi loan? A friend of mine wanted to apply but he just started a job so he does not have a payslip yet.

Herb

no payslips -Smug to say I got the lowest rate of 5.8 % without a flutter - have to laugh though as a good MSE friend who is a genuine liquid asset millionaire got approved at 6.9% - needless to say he hasn't drawn on it yet!

MarkyMarkD

Cahoot's flexible loan is very clearly advertised as being variable rate. If they want to increase the rate, by any amount, they are quite free to do so and you have no basis for complaint. There's no implied condition that increases should be related to base rate changes or anything else, for that matter.

Herb

Herb wrote:

I am pretty good at reading small print and I can not remember the words 'Promotional period'.

I have no beef with a variable rate - that can go up as well as down (in reality - they normally stay the same) - my point is that there was no 'promotional rate' 12 months ago - they have slipped it on to the web site now.

If they included in the T&C 12 months ago "we will increase your rate by 47% in 12 months time" - that might have got my attention. Or Martins for that matter - it was his recomendation that took me to Cahoot.

See http://forums.moneysavingexpert.com/showthread.html?t=108019 for more unhappy people