We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Is there a legal limit on interest rates for loans?
blbshaznay
Posts: 4 Newbie
in Loans
Hi All,
My partner has a loan of £7k on an interest rate of over 40%.... I couldn't believe it when I saw it on his paperwork, I personally can not see how this percentage is allowed, how can this be seen as a reasonable interest rate figure. Is this rate legal?
Any advise would be highly appreciated, many thanks.
My partner has a loan of £7k on an interest rate of over 40%.... I couldn't believe it when I saw it on his paperwork, I personally can not see how this percentage is allowed, how can this be seen as a reasonable interest rate figure. Is this rate legal?
Any advise would be highly appreciated, many thanks.
0
Comments
-
Yes, it's perfectly legal.
Check the T&Cs of the loan agreement.
It's not uncommon to see APRs in the 000%'s (payday loans for instance).Thinking critically since 1996....0 -
blbshaznay wrote: »Hi All,
My partner has a loan of £7k on an interest rate of over 40%.... I couldn't believe it when I saw it on his paperwork, I personally can not see how this percentage is allowed, how can this be seen as a reasonable interest rate figure. Is this rate legal?
Any advise would be highly appreciated, many thanks.
There is no legal limit on loan interest rates.0 -
The only legal limit is the one agreed to in the terms and consitions.
Must be a good reason for a rate like that. Does your partner have bad credit?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
blbshaznay wrote: »My partner has a loan of £7k on an interest rate of over 40%....blbshaznay wrote: »I personally can not see how this percentage is allowed, how can this be seen as a reasonable interest rate figure. Is this rate legal?
The high rate reflects the fact that the lender considers your partner a high risk.
If this rate wasn't allowed then your partner would have simply been refused a loan.
What would they have preferred? I assume they were happy to agree to the rate at the time? I mean, no-one forced them into accepting that loan agreement.My posts are my own opinions based on my experiences and info gathered from sites such as this.
They are not a substitute for professional financial advice - but you knew that already didn't you?
VSP 2011 - Member #25 - Started 6th December 2010 - Total As Of 4th May 2011 (21 weeks in!) - £323.67/£500 - So far so good!0 -
if you have a better credit history than your partner and you trust them,then whats stopping you taking out a loan at a "normal rate"and repaying the 40%loan?
now think about this,as the reason they have been landed with 40% is that they havent been good payers in the past....get the point?0 -
I smell something fishy here..........0
-
Thanks to all the replys re my query all very helpful :0)0
-
I bet you didn't think everybody disagreed with you did you?0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 348.9K Banking & Borrowing
- 252.4K Reduce Debt & Boost Income
- 452.7K Spending & Discounts
- 241.8K Work, Benefits & Business
- 618.3K Mortgages, Homes & Bills
- 176K Life & Family
- 254.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 15.1K Coronavirus Support Boards