The most despicable piece of financial manipulation I've ever seen! Blog Discussion

This is a Chat Forum discussion on Martin's 'The most despicable piece of financial manipulation I've ever seen!' blog that you can read here
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  • RichyRichRichyRich Forumite
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    I thought you could only borrow in whole £1000's :-S

    How do the others work out at 5.5% though if the total repayment amount varies so much?

    Sharp practice at its best
    #145 Save £12k in 2016 Challenge: £12,062.62/£12,000.00 Beginning Balance: £5,027.78 CHALLENGE MET
    #060 Save £12k in 2017 Challenge: £11,03.70/£12,000.00 Beginning Balance: £12,976.79 Shortfall: £996.30:eek:
    This is the secret message.
  • MSE_MartinMSE_Martin MoneySaving Expert
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    The reason the APR is the same is because the difference is due to the insurance cost not the loan cost - that's where the manipulation comes from :)
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • I've always been dubious about A&L. I applied for a loan from them a few years ago...absolutely perfect credit history, homeowner, and at the time loan was approx 12% of my salary, repayable over 3 years.

    I was rejected, and couldn't help but be suspicious that this may have been because I declined the insurance - without insurance the APR was market leading; with the insurance, it wasn't so attractive. My belief was that really they had an uncompetitive product, made to look competitive by disguising most of their margin as insurance rather than in the APR - of course, if this was the case anyone applying for a loan without insurance would give no margin, so wasn't accepted. Then again, I could just be a cynic.
    I really must stop loafing and get back to work...
  • ManAtHomeManAtHome Forumite
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    Hardly a surprise - most of the "best buy" savings accounts have some form of padding - can't be too long before we get a 20% bonus for the first 6 hours (don't suppose you can patent these amazing ideas..?)
  • RichyRichRichyRich Forumite
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    Thx Martin.

    I was sure something was amiss. Although the way APR is so complicated I thought that there was some other manipulation involved but the APR stayed the same. I understand now (that's better)

    Rich
    #145 Save £12k in 2016 Challenge: £12,062.62/£12,000.00 Beginning Balance: £5,027.78 CHALLENGE MET
    #060 Save £12k in 2017 Challenge: £11,03.70/£12,000.00 Beginning Balance: £12,976.79 Shortfall: £996.30:eek:
    This is the secret message.
  • jockettukjockettuk Forumite
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    i was told once by a friend who worked in a bank that if you take out the insurance with the loan you then have 28days after the start of the loan to cancel the insurance.. might come in handy if people are being turned down because they not taking out the insurance..
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  • worldtravellerworldtraveller Forumite
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    ALPHA LIMA BANK LEFT 5.5 AND YOU ARE CLEAR TO LAND! :rolleyes:

    172143162224_685042.jpg
    There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
  • Alliance & leicester are pretty sneaky; they advertise free business banking (apply by calling an 0800 number), and then refuse you any access to your account except through 0870 numbers. Not even internet banking. And they're rubbish.
  • AnnandoAnnando Forumite
    458 Posts
    Car Insurance Carver! Cashback Cashier
    Actually I have a question about AL and Money Back Bank.
    We got a new car and have applied for a £8000 loan from AL at 6.1% (They tried to flog the insurance but we declined, after 20 minutes of hearing NO NO NO they seemed to finally understand that we didn't want the insurance!), over a 60 month period the monthly repayment comes to £154.56.
    I didn't know that Money Back Bank belonged to AL so I also applied to them, this isn't a problem with our credit history, their rate is 5.5%. The same amount over the same period at 5.5% has a repayment of £152.46 a month.
    I thought the repayments to Money Back Bank at 5.5% would be at least £4 lower a month than the AL loan.
    None of them has insurance. Are their calculations right?
    I hope someone can clarify this for me, and sorry if I posted this in the wrong place!

    Cheers!

    PS I haven't signed either of the agreements yet, I was thinking about going with the MBB one.
  • Give or take 10p either way, they seem to be correct, yes.
    I really must stop loafing and get back to work...
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