Northern Rock - waste of time

Dandirt

I needed a personal loan to buy a used car and after checking the comparison charts decided Northern Rock at 5.7% was best for me as they advertise no early settlement penalty.

I spent about an hour and a half filling in their tedious online application which promised a postal decision in two days.

Five days later - still no notification. A phone call to their loans department revealed that the online applications "don't always download to their site - but if I liked I could do a 'phone aplication now"

Well, they have wasted three days of my time and I've lost the bloody BMW I was going to buy now!!

NORTHERN ROCK - WASTE OF TIME.

Dan

Dandirt

Further to this saga, I decided to 'phone my bank (HSBC), who I have been with for about thirty years, to see if they had anything to compete with the best in the comparison charts and after a bit of haggling they surprisingly came up with what seems a good deal.

They've offered me £9000 over 60 months @ 5.9% unsecured, uninsured at £172.94 per month. At the end, provided I run the full term with no probs. I then get back 25% of the interest which works out a cashback of £344.59.

This makes the total repayable on £9000/5yrs - £10,031.81p

The only penalties are - if I repay early I lose two months interest (about £45.00p -I also wouldn't get the cashback either, of course, as that's dependent on the loan running the full term).

Does this sound ok? anybody?

Dan

mrcow

Well I'm an old cynic, so I'm always looking for the catch

But it looks a good deal to me The numbers all add up and with the cashback, you're getting better than 5.9% (total repayable of £10031 actually works out the same as 4.5% overall).

Are they going to send you the offer in writing? If so, just check through the t&cs (I've looked on their website and they look pretty standard). At least you know the cancellation charges up front and you're happy with them (obviously if you do pay it off early you'll save on interest anyway).

Take care.

Dandirt

Thanks for that.

Like you say seems a bit too good but I very carefully went over the figures with the guy and wrote everything down.

Even got his name and dept. where he is based so if there is any dispute I can relate it to a person. He said all the figures are entered on computer under my account name so I can apply online, by phone or at my branch and they will all be able to bring the details up that he told me.

Are they really working such close margins at the moment?

Seems like I can actually invest virtually risk free and get a higher rate than they are charging me, which almost means I could borrow money from them and reinvest it at a better return thus making a profit. Wouldn't be worth it of course coz the returns would be too small but it does seem odd.

Anyways, all I have to do now is find another bargain beemer - that's the hard part !

Dan

MarkyMarkD

The 5.9% deal THEN 25% of the interest back does sound too good to be true.

I thought that they were offering a deal which ended up costing around 5.9% but AFTER the benefit of the 25% refund.

mrcow

MarkyMarkD wrote:

I thought that they were offering a deal which ended up costing around 5.9% but AFTER the benefit of the 25% refund.

Well that would make more sense, but when you put the figures in, 5.9% APR on £9k over 5 years comes out at £10376 total repayable (I generally use the Trading Standards website for these calcs). So it looks like the cashback is being applied on top of the low APR!

Perhaps someoone could take another look a the figures and confirm this?

I read a bit about their cashback loan last year when they came out, but there's nothing on their site now to detail how it all works.

MarkyMarkD

Their website says 6.9% APR (typical) which is equivalent to 5.3% after the 25% refund.

5.3% is just very competitive; 4.5% is unbelievably cheap.

I'm surprised, therefore, that they are offering you 5.9% APR before the refund; I'd snap their hand off at that price (if you need the loan, of course).

Bloke_with_a_simple_life

I presume the catch is if you over pay repayments and end up with an early redemption, then you won't get the 25% interest back?

Dandirt

Hells bells !

You've all got me thinkin' I must've misheard him or something.

But no - I really went over it very thoroughly with the guy and was careful to write everything down and, as I said, I took his name and call centre so I could refer back to a particular person in the event of a dispute.

Reckon I'll call in at my branch on Monday and fill in the forms - it looks like the best deal I'm gonna get.

Reminds me a bit of a saying that my wife has when she's dragging me round the shops "at that price I can't leave it on the shelf" he he!

I'll let this thread know how I get on,

Dan

Sponge

I've applied for a (car) loan from Northern Rock twice. Both times I was turned down. I go elsewhere now.

Another pet hate is applying for loans with an advertised typical APR, only to be offered one at a substantially higher rate!

Dandirt

Well - I did it !

Here's the deal from HSBC:- borrowed £9000 over 60 months at 5.9% apr.

1st repayment £173.12 followed by 59 further repayments £172.97

Total paid back £10,378.35

At the end of the 60 month term provided I don't settle early I get 25% of the interest back (£344.58) direct into my account as a cashback.

So total repaid = £10,033.77

Made all the more sweeter by the recent bank of England rate rise. I'm not a maths genius but does this now mean that I've borrowed at LESS than the B of E base rate?

AND I found a gorgeous silver 3 series BMW (which is now sitting on my drive) eighteen months old, ten thousand miles only, from an elderly couple who couldn't get on with the driving position due to an arthritic complaint. It's totally mint, still under BMW warranty for another year and a half, it must've been a £20K+ car when new and they accepted my offer of £11k.

Oh joy ! Yes every (Northern Rock) cloud has a silver (BMW) lining, he he.

Dan