Cahoot Flexible Loan

happyformonths

Hey Lynzpower,

I have a Cahoot flexible loan and logged in here as I wanted to be comforted by other people complaining about their interest rate hikes - as I am about to do.

I can't remember many of the details you want but here's what I CAN remember:

- I got the loan (originally for £6000) a few years ago - maybe in early 2002?

- Interest rate then was 6.9% I think (the advertised rate).
They gradually hiked it up through a series of "your account is changing, please read through our entire terms and conditions again to find out what is changing" (ie non-transparent) type emails, to 9.6%, which is what I'd had for about the last 18 months (maybe they just turned my original paperwork upside-down...).

- I can't identify a pattern of their little hikes - I pay off wildly varying amounts; sometimes the minimum repayment, sometimes a big chunk.

- I asked to increase my credit limit to £8000 about two years ago, and they agreed - no obvious related increase in the interest rate, as far as I remember.

- They emailed me a week or so ago saying they were going to increase my rate to 11.9% (so a hike of 2.3 percentage points, or 25% of the most recent rate) because of "changes in the market". They "still remain extremely competitive" etc etc.

I am not near my limit, and haven't been for a while. Though I've never missed a payment, I am very erratic with my amounts paid and my withdrawals, and probably "look like" a customer who needs them.

HOWEVER, since Virgin just offered to continue my 0% for a further 6 months, with a nice capped BT Fee, I don't need Cahoot any more and the time has come to close my account. Yes it's flexible, and it's been useful, but it's just a money pit as someone else said - far too easy to borrow from (this is a problem for me, though obviously an advantage for some!) and I'm not accepting such a huge hike in interest with hardly any warning.

I will be explaining my complaint when I close my account.

Cheers

HFM

ab7167

I got my loan in april 2005 for £5000. Pay off £300 per month, and the interest rate has never changed from the original 6.9%
Although I am now doing as much as I can to pay it off before they hike the interest!
Current balance is about £1500, we do take money out of it when things like car insurance fall due (account set up for this purpose - the original £5k was to buy 2 cars with, we pay in enough to cover repayment plus insurance and tax. Idea being that we would save paying the interest on the extra amount we were paying, then could have it when we needed it. If that makes sense)
Ali

ab7167

PS how do you work interest out.
My current statement says

Opening balance £1819.83
Payment received £292.50
Interest charged £9.45 @6.9%

Can't get my sums to add up...it seems to me that they have charged me too much interest?
Ali

ab7167

Got it sorted, they calculated daily.
Sorry for being thick

Ali

teabelly

I wonder whether payment protection insurance is a factor in this? I don't have it. Have others with it had their rate hiked? Have those without not had their rate hiked?

Of course I am assuming there is a logical reason for rate hikes rather than they list everyone's names out and someone throws a dart....

lynzpower

teabelly
agree with you completely

maybe they hike with if your name begins with A, B, C
or age
or hair colour
who knows eh ?

happyformonths

Just to let you know I am in the process of closing my Cahoot account as I said I would above.

I've had to go through the "close account" process three times - first they emailed me saying I had to pay £40.54 in interest, then they emailed me saying I had to *withdraw* £40.54 as the account was in credit (it was, about £55) and I needed to leave the rest which would cover the interest (hmmm), and now I'm waiting for confirmation that it's been closed and they've ceased my direct debit payments... it's all gone very quiet over there all of a sudden.

They delighted in telling me each time that "there's no need to close your account, since when you have a zero balance you don't pay any interest" (wow! thanks!!)... "it's always there when you need it". I am STILL telling them I want to close it, but they obviously don't like to lose a customer.

However, they're not that bothered about it that they've made me any better interest rate offer, even though I told them that was why I was closing. Hey ho.

I will let you know if anything else happens.

HFM

lynzpower

Happy for months, dont blame you mate

Sounds like Cahoot are a law unto themselves

Im still none the wiser on the legality of the whole thing, time to go back to consumer direct again I think

cjm2508_2

The cahoot Flexi loan is an interesting proposition...however, the Marketing team control the rates and can increase whenever they choose once the 12mnth introduction is over; earlier this year there was a plan to do just that to widen margin as many of the loans o/s the intro period were still at the intro rate. Kick up a stink if you want to stay and benefit from the flex. they will listen. Interestingly the website also has the names of the people you need to hassle. Trust me on this - I have inside knowledge!

MarkyMarkD

They appear to be whacking up rates left, right and centre.

Probably an impact of the Santander takeover (or maybe not)