Northern Rock in trouble?

scarlet74

Sorry if this has already been asked, but Northern Rock seem to be in a bit of trouble - and I've got a loan with them!

It's unsecured, and only for £1500, but if they did go under (which isn't unthinkable at the moment) does anyone know what happens to the loan?

Obviously, I still have to pay it but does anyone out there know whether the terms etc will still be the same?

Cheers m'dears!

divadee

i dont think they will go under scarlet, the BOE has lent money to a number of banks this year barclays also being one of them.


It did start a discusion in this house last night asking what would happen to our loan as well. I think (and im not 100%) sure you would just ccontinue to pay it as usual.

They wouldnt be able to change the terms or rates i dont think

WildHaggis

Northern Rock is not in trouble. It just needed cash, and couldn't get enough from its usual lenders. So, it went to the Bank of England, paid a little extra, and borrowed what it needed short term.
Even in the unlikely event that NR was in trouble, and was ultimately liquidated, its assets (the loans it made to YOU) would be sold to another bank. You would still have to pay up. So, please keep paying all your existing loans, or you will get yourself into trouble.
Any new owner would not be able to alter the existing terms of existing business. Of course, if you have a clause allowing NR to increase your interest rate, that could be done at any time.

ZZZZZZ_2

You would still be liable for the loan - as to whether NR are in trouble, I think it is clear that they are in real trouble now given that market reaction as well the fact that depositers may well transfer funds out of NR - look at their Blance Sheet!

ormus

they are only in trouble in so far as the incompetant directors will have to resign, and someone will then buy the business.

Tr@cker

With a 30 something % drop in their shares and savers queing to withdraw their money-one couple want to take out their 1 MILLION deposit i'd say they ARE in troule and possibly looking like a bargain takeover buy for one of the big banks.
Its more of a worry for investors than people with loans.

remoks

Northern Rock most definately ARE in trouble - how can you argue otherwise. Their whole business model , i.e borrowing money on the open market to fund mortagages & loans, has been shown to be fundamentally flawed. They are not alone though, Bradford & Bingley & the Alliance & Leicester operate in similar ways, i'll give them another 40 days if the credit-crunch we are now in persists.

Don't worry though, your loan will be safe :rolleyes: and you'll still be able to make payments !

In all likelyhood NR will be bought out by one of the big-boys, i.e one of the larger European Banks, rumours mention the Bank of Santander and they will "inherit" your loan.

Butlers1982

Northern Rock most definately ARE in trouble

You know nothing.

remoks

Butlers1982 wrote: »

You know nothing.

:rotfl: You want to put £50.00 down at the bookies then that Northern Rock will be an "independant bank" still this time next year

Bernard_Coleslaw

remoks wrote: »

:rotfl: You want to put £50.00 down at the bookies then that Northern Rock will be an "independant bank" still this time next year

Which is a completely different thing from saying they're in trouble.

Would you want to place that bet for any number of other High St names? None of them are in trouble, but any of them could be owned by someone else at some point in the future.

Chippy99

Butlers1982 wrote: »

You know nothing.

Whereas - clearly - you don't know what "in trouble" means.

share price dropping by 2/3rds and falling

billions being drawn out by panicking savers

likely break up of the business as parts will likely be acquired by a pack of acquisitors

And that's not "in trouble"????!?!! How much more trouble can it be in?