Sainsburys - The Alternative Loan

Keith

So, I apply for a loan from Sainsburys, 7 year term, home owner, all the boxes ticked long term employment, long bank, no history of bad credit, etc.

Loan is for £12,500.

Sainsburys decline, fair enough in the last two months, I've bought a car on HP, moved a credit card balance to a new 0% and applied for a remortgage. My credit file must be screwed.

The phone rings, "hello we've reviewed your application and I'm pleased to say it's now approved".

"Great!"

The lady goes on...

No repayments until December, I don't remember that.

There is a charge (£60irc) for sending the docs by DHL, odd, I point out I'd prefer them sent by post as I'm not in a rush "we've got to feed the horse".

She giggles.

"So the APR is going to be 19.9%, the repayment will be £269 per month"

"That's a lot more than I applied for"

"Oh, but just think it's so much less than you pay now"

"It may be, but we'll be debt free in 2 years, so it's not worth it, is it?"

"Think of the lower repayments!"

I realise that I'm being sold a very expensive alternative product so "Why don't you email me a break down of the costs of the loan"

"We can't do that, we'll send it with the contract"

"The contract by DHL?"

"Yes"

"Ah the one you charge for"

I end the call, and work out the cost of this loan offered by the friendly person at Sainsburys.

Inital Loan of £12,500
7 years at £269.58
Total repaid = £22,644.72

The initial total repaid was going to be £16,351.44

Ouch! Debt consolidation isn't worth it.