Personal loan interest rate

andydiysaver

Clive_Woody wrote: »

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This is not malpractice, this is how mainstream lending works. Yes in an ideal world we would all get the quoted rate, but in that ideal world everyone would pay back what they borrowed.

Let's examine this perfect model which isn't a real one because bad debtors will always exist

if in an ideal world we all paid back what we borrowed do you think we would all get the quoted rate? Do you think even 75% would get the quoted rate?


This is my point. I'm fine with greed, profit, and a row of snouts at a neverending trough as far as the eye can see. These are facts of life, these won't change in my time on this planet.


what I am less fine with is the means by which these institutions justify their greed. I'd rather have a conversation with a greedy banker than a greedy lying banker. i.e. several orders of magnitude more people get the rubbish rates than is justified by the risk and the reference agencies. The reason is not that their solvency is in any doubt. The reason is they are sitting duck cash cows, and lining up in a queue to be the next mug.

bigadaj

andydiysaver wrote: »

Let's examine this perfect model which isn't a real one because bad debtors will always exist

if in an ideal world we all paid back what we borrowed do you think we would all get the quoted rate? Do you think even 75% would get the quoted rate?


This is my point. I'm fine with greed, profit, and a row of snouts at a neverending trough as far as the eye can see. These are facts of life, these won't change in my time on this planet.


what I am less fine with is the means by which these institutions justify their greed. I'd rather have a conversation with a greedy banker than a greedy lying banker. i.e. several orders of magnitude more people get the rubbish rates than is justified by the risk and the reference agencies. The reason is not that their solvency is in any doubt. The reason is they are sitting duck cash cows, and lining up in a queue to be the next mug.

If the loans market works effieicnetly, which it largely seems to do, then ther is sufficient competition for people to be able to secure a good rate.

There are two things which mitigate against this which is the adverse reaction to people's credit file that occurs when people do shop around and the average consumers ignorance and laziness in not researching loans sufficiently.

Neither of the above points are directly the fault of banks, and it's amazing how many people, more elderly but by no means exclusively so, still associate banks with reliability and integrity when the opposite is true.

I'd agree with your differentiation between greedy and lying bankers, and that rubicon was crossed in 2008 when the extent of dishonesty in financial services was made bare, with subsequent events providing further evidence.

I love the oft quoted phrase that you have to pay top money to get the talent, with the next sentence often being well you can't say people are criminals if they are incompetent, can we work out whether they are incompetent or absolute talent, I can't see them being both!

andydiysaver

bigadaj wrote: »

If the loans market works effieicnetly, which it largely seems to do, then ther is sufficient competition for people to be able to secure a good rate.

There are two things which mitigate against this which is the adverse reaction to people's credit file that occurs when people do shop around and the average consumers ignorance and laziness in not researching loans sufficiently.

Neither of the above points are directly the fault of banks, and it's amazing how many people, more elderly but by no means exclusively so, still associate banks with reliability and integrity when the opposite is true.

I'd agree with your differentiation between greedy and lying bankers, and that rubicon was crossed in 2008 when the extent of dishonesty in financial services was made bare, with subsequent events providing further evidence.

I love the oft quoted phrase that you have to pay top money to get the talent, with the next sentence often being well you can't say people are criminals if they are incompetent, can we work out whether they are incompetent or absolute talent, I can't see them being both!

you can see their behaviour in share prices, first few jump on then all jump on then absolute confidence and all jump on, then it crashes and the first of the down betters jumps on, repeat cycle in reverse. The reason they crashed is they were expecting to make real wealth out of wealth that isn't real. The input to these bets was our money - but really , how rubbish do you have to be? I'd love to hear a bankers take on who will win the next horse race because it is guaranteed to come last - these are people who can flip a coin 20 times and call it the wrong way. This isn't just random bad luck, - it's far too consistently wrong to be bad luck!! incompetent doesn't cut it because there is absolutely no randomness about it. Consistently losing when the income they make from loans, mortgages, other stable investments by far eclipses the rates they pay out on their highest ISA ... then to have all that cash, I bet my cat could make more than these "top talent" just by employing the laws of averages and pouncing on a sheet saying up and down, being right 50% of the time. These bankers have to be wrong 99.9% of the time to be able to take that level of return from really profitable stable schemes like loans, to whatever they're gambling on and lose the lot and not get anything back!!. If that's top talent, I have to agree- they're almost supernaturally gifted at losing!!!


.....unfortunately with their snappy dress senses, penchant for fast cars, and aforementioned need for their next billion's worth of chips to go on options, losing isn't an option. That's why next time they'll win.


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