I challenged the apr of a loan and got it reduced

anntics

Hi

I recently applied for a loan with my main bank that I have been with for over 20 years. They also happen to be one of the best buys on MSE so it pays me to stay loyal. They are advertising a typical apr of 5.9%. I have an excellent credit record and preferred to borrow the money rather than spend savings. At the current rates it makes financial sense.

I was approved for the loan, but at a much higher rate than advertised. I rang them to find out why and after some discussion the CSA said she might be able to get it reduced. She went away, talked to the manager and came back with an offer of the advertised rate!

peterg1965

Well done you, just goes to show that it is worth pressing the point especially if you are a long suffering customer!

tom188

anntics wrote:

At the current rates it makes financial sense.

How so? Do you have an account that is paying you 5.9% net?

Pantera_Fan

Likewise, I have literally just go off the phone to a bank I applied to for a loan (which is not my current bank). They advertised 6.9% but I got offered 11.9%. They called up to chase my custom and I said was not interested.

She went away for a few mins and came back with 7.9%. Still not their advertised rate but considering that i've had quite a few searches recently and was thinking of using the egg money card also at 7.9% instead of more searches I don't think its too bad. Should of pushed for a better rate but means I can now pay off my existing debts to current bank and switch to a better account.

deliciosa

Well done! great success!

anntics

Hi Tom188

I worked out that over the 5-year period of the loan the cost is roughly the same, whether I borrow the money or spend it up front and repay the money into my savings.

If I borrow the money I have to make the payments. If I spend the money up front I would need to pay at least the same amount as the loan payment back into my savings account every month for 5 years to arrive at the same point, and there is always the temptation to spend that money instead of saving it.

If interest rates continue to rise and I suddenly needed money for a major purchase, say my boiler burst (it's getting on a bit like me) I might have to borrow it at a much higher rate than I can get the loan now, because I will have spent my savings.

It is a calculated risk, but the signs are that interest rates will stay high in the short term, and if it all goes pear-shaped, I still have my savings intact to pay off the loan.

anntics

Well done Pantera Fan

It supports my main point, that like all salespeople they want to get the most out of you and that the first offer is not necessarliy the bottom line.

Since watching a programme series called 'Don't get done, get Dom' on the TV last year, I always haggle on major purchases now. It might not get you anywhere, but if it doesn't you are no worse off and can walk away. It worked on a recent car purchase, we were told we were being offered 'the best possible deal on this model', but decided to walk away. The next day we got a call from the salesman offering a further £1000 px for our old car.