HSBC Managed Loan -

noah271007

It stated on the agreement form.

Interest rate 7.000% over our base rate (Bank of England base rate 5.75%), which, at this date of this agreement, gives a variable per annum rate of 12.75%

As the base rate is now 1.5%, it is currently 8.5% APR.

I would have thought flat rate is generally more expensive than APR??

ShelfStacker_3

It doesn't say BOE base rate, it says "our" base rate. As in, HSBC's. That could be anything. (Devil's advocate...)

chambta

noah271007 wrote: »

It stated on the agreement form.

Interest rate 7.000% over our base rate (Bank of England base rate 5.75%), which, at this date of this agreement, gives a variable per annum rate of 12.75%

As the base rate is now 1.5%, it is currently 8.5% APR.

I would have thought flat rate is generally more expensive than APR??

Other way around. I thought you didn't know what they are?

new2civvystreet

I know of a few managed loans being opened with HSBC. For you to compare your experience noah271007:

At the time the member of staff completed a full budget planner with the customer to make sure there was absolutely NO other way they could afford a personal loan/overdraft/credit card. They then explicitly told the customer that this was an absolute last resort. They made sure the customer realised that there was NO chance of any other lending being available from HSBC while the managed loan was in force. The customer was then put on the phone with the assitance of the member of staff to talk to the right department to get the loan put into place.

noah271007

Thanks, that's very informative.
Well, it must been to do with the previous default i had with o2 that declined the offer for a personal loan. I do remember someone on the phone at the branch in a room and saying that paperwork will be sent to my address for me to sign and sent back. I should have asked but i do not know much about finance and APRs and all that kind of stuff. I studied International Relations if you all are interested!) But what i DO KNOW that my account was in order... no arrears, no missed payments etc. To double check, i went through my statements and there is nothing to indicate that i have mismanaged the account!! Credit card statements have no problems as well. It is a mystery but i really thought it is a loan that will be practical for me to pay a fix sum of money each month. Maybe because I was always been overdrawn (within the £2,000 o/d limit) for two years had a bearing on the decision (affecting hsbc behaviour score).

I am profoundly deaf, and more often than not, i do have difficulties in communicating with certain people. I rely on lipreading, so perhaps there was a misunderstanding what went on at the branch way back in 2006.

ShelfStacker_3

noah271007 wrote: »

Maybe because I was always been overdrawn (within the £2,000 o/d limit) for two years had a bearing on the decision (affecting hsbc behaviour score).

Exactly. Being permanently overdrawn is usually an indicator of financial distress. Virtually every bank will see it that way. It's something a managed loan is usually a candidate for.

(No offence intended, if any taken...)

noah271007

ShelfStacker wrote: »

Exactly. Being permanently overdrawn is usually an indicator of financial distress. Virtually every bank will see it that way. It's something a managed loan is usually a candidate for.

(No offence intended, if any taken...)

None taken!

I don't think it is right for me to have the managed loan because I was a student, and HSBC allowed me to have £2,000 overdraft facility because I studied at university for 5 years. Like I have mentioned in the posts on this thread, after graduation, HSBC do have a plan in place for the graduates like myself to reduce the overdraft by £500 each year until it reach zero. It gives the graduates a chance to settle down into the real world. It still would have been an interest free o/d facility but each year a reduction of £500.

noah271007

To make it clear, HSBC have an arrangement in place for graduates to repay their overdraft after graduation.

It goes like this (an example)

Graduated with £2,000 after 4-5 years at university 2006.
July 2007 £1,500
July 2008 £1,000
July 2009 £500
July 2010 £0

As long you repay and clear £500 on interest free overdraft per year, the remaining overdraft facility REMAIN interest free UNLESS i go overdrawn -over the agreed limit without permission.

In my case

£2,000 overdraft after graduation 2006. Balance is within the limit.
Few months later after Graduation, i was offered managed loan.

How is that right? A LOT of students like myself are always OVERDRAWN whilst at university, but it is free to use as long it does not breach the agreed limit.

I do think i have been mis-sold and i will write to customer services to make an official complaint and request reasons why i have been offered managed loan and have interest charges applied on my managed loan refunded.

chambta

noah271007 wrote: »

To make it clear, HSBC have an arrangement in place for graduates to repay their overdraft after graduation.

It goes like this (an example)

Graduated with £2,000 after 4-5 years at university 2006.
July 2007 £1,500
July 2008 £1,000
July 2009 £500
July 2010 £0

As long you repay and clear £500 on interest free overdraft per year, the remaining overdraft facility REMAIN interest free UNLESS i go overdrawn -over the agreed limit without permission.

In my case

£2,000 overdraft after graduation 2006. Balance is within the limit.
Few months later after Graduation, i was offered managed loan.

How is that right? A LOT of students like myself are always OVERDRAWN whilst at university, but it is free to use as long it does not breach the agreed limit.

I do think i have been mis-sold and i will write to customer services to make an official complaint and request reasons why i have been offered managed loan and have interest charges applied on my managed loan refunded.

Unless you proactively approached them for a loan and were not told about the alternative long term process for repaying the o/d interest free it seems that you were treated badly.

Have you found out whether the loan rate was based on a flat rate yet?

noah271007

chambta wrote: »

Unless you proactively approached them for a loan and were not told about the alternative long term process for repaying the o/d interest free it seems that you were treated badly.

Have you found out whether the loan rate was based on a flat rate yet?

YES i feel let down and angry. I do feel a little stupid i accepted the managed loan not knowing the implications! Being profoundly deaf gives me immense challenges that i had to overcome dealing with people.

I will find out about whether the managed loan is based on a flat rate tomorrow. Thanks for your help again.