Headline rate 'scam' - M&S Loans

regency_man

Pixie5740 wrote: »

Who says you are very good with money?

You? How do you know how you compare with other borrowers? You don't have an overview of each M&S loan application unlike M&S Bank?

Experian? Ask them for a loan then. Please tell me you do not pay £14.99 a month for your Experian credit score, financially savvy people wouldn't.

I don't, I pay £3.99 a month because I haggled them down after the introductory offer. It's amazing what they will offer you if you threaten to leave. I do it mostly for the fraud prevention part (only way I caught this incorrect 'second application' from M&S).

The attitude on this forum is disgusting, if you say you are good with money and give examples, people accused you of gloating and criticise you. If ask about rates and question decisions people assume you 'rent and work in a pub' <-- direct quote from earlier. :rotfl:

Pixie5740

regency_man wrote: »

I don't, I pay £3.99 a month because I haggled them down after the introductory offer. It's amazing what they will offer you if you threaten to leave. I do it mostly for the fraud prevention part (only way I caught this incorrect 'second application' from M&S).

The attitude on this forum is disgusting, if you say you are good with money and give examples, people accused you of gloating and criticise you. If ask about rates and question decisions people assume you 'rent and work in a pub' <-- direct quote from earlier. :rotfl:

That's still £3.99 a month too much.

I find your attitude pretty ridiculous. You start a thread on a topic that has been discussed and explained many, many times just because your ego can't take not being offered the headline rate.

regency_man

Nearlyold wrote: »

I didn't say all customers. And of course you don't base policy on the premise that everyone is dishonest BUT you do have to take into account "Moral hazard" when formulating policy.

Agree but moral hazard is built into everything risk based whether insurance or financial product. It doesn't change depending on the way you sell the product. I can apply for 100 insurance policies to get the best insurance rate (by telling the truth). But I can only apply for 2-3 loan products before the very fact that I am applying starts to impact the decision of whether I get accepted in the first place. That's the problem here - remove the credit search for loan quotes, you solve the problem.

Faith177

regency_man wrote: »

I don't, I pay £3.99 a month because I haggled them down after the introductory offer. It's amazing what they will offer you if you threaten to leave. I do it mostly for the fraud prevention part (only way I caught this incorrect 'second application' from M&S).

The attitude on this forum is disgusting, if you say you are good with money and give examples, people accused you of gloating and criticise you. If ask about rates and question decisions people assume you 'rent and work in a pub' <-- direct quote from earlier. :rotfl:

I'm going to bite and guess the last sentence is aimed at me??

If you read my post correctly I didn't mention you at all I was referring to my housemate using him as example of how companies view different situations but of course you'd just rather twist things to fit your own argument

regency_man

Pixie5740 wrote: »

That's still £3.99 a month too much.

I find your attitude pretty ridiculous. You start a thread on a topic that has been discussed and explained many, many times just because your ego can't take not being offered the headline rate.

Actually I started a thread to provoke a discussion - and it's kept me entertained for a few hours.

I was hoping people could keep the discussion objective around the practices in the consumer leading industry - and not make personal remarks but alas, MSE forums are like all other forums in that respect.

regency_man

Faith177 wrote: »

I'm going to bite and guess the last sentence is aimed at me??

If you read my post correctly I didn't mention you at all I was referring to my housemate using him as example of how companies view different situations but of course you'd just rather twist things to fit your own argument

Not aimed at you- just a commentary on the way these discussions go, that little bit just happened to stick in my mind. We're in the same boat by the way, professional homeowners and I let out one of my rooms too, I just have to be careful saying it as I'm the OP and will get negative comments about it

If you think about it carefully though, being a home-owner is mostly irrelevant in that situation. Lets just pretend your housemate and you earn the same, (he's been doing loads of extra shifts at the pub) but he rents off you.

If you had a hit to your income (illness, injury) which are you going to default on first, your mortgage (and lose your house) or your unsecured loan (and get a bit of a bad credit rating)? The loan of course.

If your housemate was in the same position would he default on the loan (and get a bad credit rating) or just stop paying you (which you can't report to anybody). Probably you I'm afraid.

Thrugelmir

regency_man wrote: »

If you had a hit to your income (illness, injury) which are you going to default on first, your mortgage (and lose your house) or your unsecured loan (and get a bit of a bad credit rating)? The loan of course.

And the conversation goes full circle.

Lenders not only credit check you. They now profile you. From the data obtained from the CRA's, your employment etc etc. Lenders can pretty accurately tell the type of potential borrower you are likely to be. Therefore pricing of risk is getting better and better. The rate you'll be offered is the same as others of a similar ilk. Nothing personal. Lenders work on lending pools. Not underwriting individual borrowers simply too expensive to do. At low lending margins.

Nearlyold

regency_man wrote: »

Agree but moral hazard is built into everything risk based whether insurance or financial product. It doesn't change depending on the way you sell the product. I can apply for 100 insurance policies to get the best insurance rate (by telling the truth). But I can only apply for 2-3 loan products before the very fact that I am applying starts to impact the decision of whether I get accepted in the first place. That's the problem here - remove the credit search for loan quotes, you solve the problem.

The risks are different - if you applied for 100 insurance policies for the same insurable event and took out more than one of the policies for the same insurable event you would dilute the risk, if you apply for more than one loan and take out more than one loan you increase the risk.

regency_man

Nearlyold wrote: »

The risks are different - if you applied for 100 insurance policies for the same insurable event and took out more than one of the policies for the same insurable event you would dilute the risk, if you apply for more than one loan and take out more than one loan you increase the risk.

That's true, many 'open' applications could be a higher risk. But if you apply at one rate, then get offered another, you should be given the option to formally decline the quote, and then that search should be removed from your file. That way there is no additional risk to lenders, and no penalty to consumers for shopping around.

And as another user on this thread has noted here (https://forums.moneysavingexpert.com/discussion/5409319) - there IS benefit to shopping around, 15% from one lender, 4% from another. Same amount, same circumstances.

MABLE

I wanted a loan recently and applied to Nationwide for £15,000 and got a straight accept with an apr of 3.4 percent. However this was for a car but in the end decided against it and decided to save up instead.