Picture interest rate

sgianthebard

I took out a secured loan from Picture 3 years ago to consolidate a load of loans, credit cards, etc. At the time my interest rate was 6.9%. This increased slightly as the months passed and s now sitting at 8.3%.
Since the recent drops in interest rates, Picture have not changed the interest rate on my loan at all. Not even a quarter per cent drop.

Is this right and fair?

cyril82

well they don't have to pass on interest rate cuts in all instances, if you have a variable rate then it should go down aswell as up, but i can't comment too much as i don't know exactly what kind of agreement you have.

did you get sold ppi with the loan? might be able to reclaim it if you did and claw something back if you think they are being unfair.

Just an idea.

ILW

They can charge you whatever they like. Whether it is right and fair is a moral judgement. I would guess the lender is thinking more in business than moral terms.

cyril82

yep, they are looking after their own interests and to be fair are quite entitled to, but equally so are consumers, so if you were sold ppi and think it might have been missold try reclaiming, there is info on ppi reclaiming on the main pages of this website.

sgianthebard

Cyril, thanks for the reply. I didn't take ppi with the loan and they have conducted my account satisfactorily for the past 3 years. The agreement I have is pretty standard as far as I am aware and the rate is variable. It does say on the agreement that the rate may increase or decrease.

ILW, thanks for the reply. You confirmed what I was thinking really. I had just hoped I was wrong and there may be some lawful obligation for them to pass on the drops in interest rate rather than only a moral obligation (which no good business could be expected to meet)

cyril82

sgianthebard wrote: »

Cyril, thanks for the reply. I didn't take ppi with the loan and they have conducted my account satisfactorily for the past 3 years. The agreement I have is pretty standard as far as I am aware and the rate is variable. It does say on the agreement that the rate may increase or decrease.

ILW, thanks for the reply. You confirmed what I was thinking really. I had just hoped I was wrong and there may be some lawful obligation for them to pass on the drops in interest rate rather than only a moral obligation (which no good business could be expected to meet)

you would have to read over your agreement, it depends how they decide the increase and decrese, for example if it is a tracker and your agreement states you will recieve a rate that tracks the bank of england base rate at say 2% above and your not getting that rate you may have cause for complaint.

do you know what kind of variable rate you have?

sgianthebard

cyril82 wrote: »

do you know what kind of variable rate you have?

I don't know. I'll dig out the loan agreement and have a look.

Rafter

Your loan is hopefully regulated by the FSA and therefore covered by the 'treating customers fairly' rules.

However, these are pretty vague and I think picture would have to treat you a lot worse for you to bring a case.

What you do need to be careful of is that picture don't whack the rate up to 10%+ if base rates rise in the years ahead, or at least have a plan on how you would budget for that.

You should also try to save up or prepay as much of your loan as possible so that you can remortgage your whole loan to a fixed rate to give you some certainly and to avoid picture having your over a barrell like this.

Good luck

R.

_Andy_

sgianthebard wrote: »

I took out a secured loan from Picture 3 years ago to consolidate a load of loans, credit cards, etc. At the time my interest rate was 6.9%. This increased slightly as the months passed and s now sitting at 8.3%.
Since the recent drops in interest rates, Picture have not changed the interest rate on my loan at all. Not even a quarter per cent drop.

Is this right and fair?

It is a variable rate loan. The lender is entitled to vary it. So yes it is perfectly right and fair.

sgianthebard

_Andy_ wrote: »

It is a variable rate loan. The lender is entitled to vary it. So yes it is perfectly right and fair.

Thanks for your opinion Andy. I don't agree with you though. Just because it is a variable loan, the lender isn't entitled to vary it on a whim surely? There must be a reason for changing the rate and if they change the rate when bank interest rates go up, they should be expected to change the rate when bank interests go down.

sgianthebard

Rafter wrote: »

Your loan is hopefully regulated by the FSA and therefore covered by the 'treating customers fairly' rules.

However, these are pretty vague and I think picture would have to treat you a lot worse for you to bring a case.

Thanks Rafter.

I haven't been treated badly by Picture at all and I have no complaint with their customer care. I just think it would be fairer to their customers if they dropped the interest rate in line with the banks as they are very quick to raise interest rates when the banks do.