Loan arrangement fee, we didnt take the loan.

outrageous_monkey

Hi,

I'm not sure if I am posting this on the right thread so if the OP wants to move it, then ok.

Right, my husband applied for a personal loan about 10 days ago, this was then changed to a business laon (husband has just become a limited company) by the bank. This was for a new car. However, when we went to the car dealership we were offered a lot cheaper interest rate. Husband cancelled the loan at the bank, told them to take it back, but we are still being charged £250 for a loan that was only in the account for a max of 7 days :mad: .
Do we have to pay the full amount (which if we have to, then we will) or could I write to the bank and ask them to reduce this amount seeing as we didnt use any of the loan , plus they changed it to a business loan and not a personal loan like OH had applied to. Plus, some tips as to how to write the letter too. Any advice greatly received.

Thanks in advance.

Julie

jonesMUFCforever

What are the terms and conditions of the loan? Was there a cooling off period?
Your husband does seem to be easily led from Personal Loan to Business loan to car dealer loan doesn't he? Notwithstanding that historically Business loans have been cheaper than Personal Loans the bank have set up a loan for which he was advised of the charges beforehand, and it is not their fault that your husband changed his mind.

outrageous_monkey

The reason we decided on a loan from the bank is because we believed the bank interest rates to be lower than that of a main car dealership. He applied of a personal loan, it was the bank who decided to put it thru as a business loan, not us. I will have a look to see if there is any mention of a cooling off period. We dont mind having to pay it, its just that it seems an awful lot of money for something that we gave back pretty much straight away. £250 for tapping a few keys on a keyboard. If its fair, then so be it. Thanks anyway.

jonesMUFCforever

Fair has nothing to do with it.
If he is a business customer then he should have been offered a business loan which is what appears to have happened.
Why did he not approach the dealer to find out the finance available before going to the bank to make a sensible comparison?
Are you also sure that the finance deal offered by the dealer really is better - did they quote an APR rate or a flat rate?

beanielou

I would imagine that there will be something in the terms and conditions which will indicate that the fee is payable if you actually draw down loan or not.
HTH

MarkyMarkD

I would reiterate ejones' point. Dealerships rarely quote APRs and normally mislead customers about the true rate of interest on their loans to get them to sign up.

That said, a high street bank loan is equally unlikely to be a good rate of interest.

Under the consumer credit act, there is a statutory cancellation provision. But this doesn't apply to business loans IMHO.