Lloyds TSB offering me a loan

boots_ranger

Hello all,

popped into my local branch today to put in a cheque and the cashier said the system is offering me a loan, usual thing, they've asked me before and I've usually ignored it. Phonebank did the same thing a while ago, but the rate wasn't great.

Applied for a loan 2 months with Northern Rock and was knocked back, today, I thought I'd see what they have to say.

Talked to the guy and he said he could get the rate down below 10% (seemed to be pretty sure about this), I'm asking for £10000 over 36 months, the total figure quoted was about £384 which included about £50 insurance cover (bit steep).

As I say I tried and failed with the NR Loan to pay off my CC bill, currently incurring a interest charge of around £78 a month, want to get this in order.

Should I go for the loan? is it too early after applying for the NR loan 2 months ago and would I be able to arrange alterantive insurance if I did take out the loan ?

Or should I wait a few months and apply for a low rate CC ?

Cheers

grumbler

boots_ranger wrote:

...Talked to the guy and he said he could get the rate down below 10% (seemed to be pretty sure about this),

10%? Pretty sure? :rolleyes:

I'm asking for £10000 over 36 months, the total figure quoted was about £384 which included about £50 insurance cover (bit steep).

In fact this results in 22.5% APR: http://www.whatsthecost.com/loan.aspx

As I say I tried and failed with the NR Loan to pay off my CC bill, currently incurring a interest charge of around £78 a month, want to get this in order.

If your CC balance is about £10K, the APR is just about 10% - much less than 22.5%. If the balance is much less than £10K and APR is higher than 22.5%, why on earth do you want to borrow £10K at so high APR?

boots_ranger

Grumbler

Well he seems pretty sure about it!

Those are the figures I remember from what he said, would probably say no to the insurance anyway, will double check with him about the figures again.

My CC rate is about 19%, it's an old Trustcard and the rate is killing me at the mo, about £3500 of the balance is a balance transfer at 0%, but it's expensive nonetheless.

grumbler

boots_ranger wrote:

Well he seems pretty sure about it!

For 10% monthly payments are £322. The rest £62 (about £50 :rolleyes: ) is insurance. Do you need it? Does it really cover you? In fact it is just like extra 12.5% in APR.

...would probably say no to the insurance anyway, will double check with him about the figures again.

I am pretty sure that if you refuse to take insurance, he will offer you higher APR ...

My CC rate is about 19%, it's an old Trustcard and the rate is killing me at the mo, about £3500 of the balance is a balance transfer at 0%

So, if the total balance is about £10K, average rate (while 0% lasts) is about
19%*6.5/10=12.35%. However, even with 19% this cost you less than the loan with insurance.

boots_ranger

grumbler wrote:

So, if the total balance is about £10K, average rate (while 0% lasts) is about
19%*6.5/10=12.35%. However, even with 19% this cost you less than the loan with insurance.

Ok, make sense, I did assume that he would raise the APR if no insurance was taken.

Might try my hand at a CC then, recently used checkmyfile.com and they recommended some cards. Any idea if these reccommendations are any good ?

mrcow

imo 10% is a terrible rate for 10k.

Anyhow......

10% over 36 months is £320 per month (I make £384 more like 24% apr) and you'll be paying over £1500 interest over the three years.

It would be much better to negotiate more onto 0% and then actively pay it off over a shorter period of time. Have you posted an SOA on the debt free wannabe boards?

Call him back and get the requote (in writing with the apr stated and confirmed as an offer) without the insurance and post the figures back here before you sign up?

regularsaver1

They can not offer you a higher rate for not taking insurance - it is your decision

Britt

Beware if you are struggling with payments to credit cards etc., They watch your account closely and know exactly when to dangle the bait, but if anything goes wrong and you find yourself in difficulties with loan repayments, they get nasty.

boots_ranger

Thank people,

haven't done an SOA yet, will try and do it soon.

He's going to call me back on Thursday, will go without the insurance and see what I get offered and post it here.

boots_ranger

As promised the bank came back to me and I told him what I wanted, said he would go away and see what he could do.

He phoned back about 20 mins later with an offer of:

£10000 over 36 months @ £311 a month / 7.9% apr

which I think is quite good, no?

I would probably be able to overpay upto £400 a month everynow and again, which he said I could do and bring down the interest payed.

Thoughts?

mrcow

That seems much better (and the figures add up). You'll be paying a total of £1200 in interest over the period, so I'd still say if any 0% deals are out there then they are worth looking at.

Note of caution.....if you are looking to overpay, check what the t&Cs are for early repayment of the loan.


Still do your soa on here though as it will help with budgeting and will put you in a stronger financial position.