Northern Rock Hard Sell

janeymates

Just wanted to post a more positive opinion to even things up! I applied for a £14000 loan with Northern Rock, online, which was accepted 2 days later and the forms duly sent out. I selected not to protect my payments and was sent an additional sheet of paper stating that i had made this decision and was i sure. By this time i had received a kind offer of a loan from a family member for some of my debt, so I rang and asked if i could alter the loan amount to £5k, which was immediately accepted and new forms were received the next day. I returned the forms on the wednesday and the funds were in my bank on friday morning.

I was not charged for the transfer (i think the £45 charge is for express 24hr service) and i was never telephoned or harrassed about taking protection insurance for either amount.

I have had loans with NR in the past so i don't know if this made a difference and i have paid loans off early with no penalty so i am (at the moment!) on of the seemingly few happy customers!

Good luck to everyone having problems, and remember to check back on this site regularly for the latest best rates on loans, I always look here first :-)

MarkyMarkD

Well done, janey.

barney_1972

I've recently applied and been accepted on a £8k NR loan. The rate was great at 5.6%apr, however there is also bundled with it 'loan protect' gold for around £4k, making the total repayable to £14k over 10 years.

I have not signed the forms yet, thought i'd read this thread first.

I do not want to take the loan protect out as it seems an extortionate amount but i'm not sure whether the salesman can withdraw the offer if i choose not to take the loan protect.

I did ask if i would be accepted (although i guess i must have already been credit scored) if i chose not to take the cover and the salesman said that all he could say was that NR had its own criteria.

This kind of gave me the feeling that if i choose not to take the cover then i may be declined.

Is this the case?

Regards
Barney

Bun

Short version - they couldn't really say much when to be covered fully by Martin's recommended Payprotect was £7 per month and their PPI was a minimum of £50.
:rotfl:

barney_1972

Thanks for the reply, but this still does not answer the question:-

If i choose not to include the loanprotect as part of the deal, although i've been credit scored and accepted can i still be declined on the basis that loanprotect is no longer part of the deal?

Regards

Rafter

They cannot make the loan conditional on taking the PPI. If they did they would have to include the PPI in the APR calculation.

Therefore you can refuse the PPI but still accept the loan offer.

If they give you a hard time just tell them you have found the equivalent cover for £7 a month versus the £50 they are going to charge you.

The only reason loan companies can afford to offer 5.6% apr (which is below most standard mortgage interest rates) is because the PPI prices are extortionate and over 50% of customers take them out.

On a Northern rock loan the PPI can more then double the cost.

Think about it. The bank can borrow money at about 4.7% (slightly above base rate) and offers loans at 5.7% - about a 1% premium. But over 1% of loans are written off each year by customers who lose their jobs or who go bankrupt.

At 5.7% the bank makes a loss. Anyone who doesn't take the PPI will be a loss making customer which is why they give you the hard sell.

If PPI had to be sold at more reasonable rates, the APR on personal loans would have to rise to around 9% for the bank to make the same profit.

For now though, smart people can borrow at 5.7% and get subsidised by people who take out PPI and end up paying about 12%

Personally, I don't think that is a fair system.

R.

al.green_2

I had a similar experiance with Northern Rock, although I told them early on in their sales pitch that I had researched it and found that I could get a considerably cheaper deal elsewhere. They still went through the pitch (I guess they've got a script) but the guy on the phone seemed resigned to the fact I wasn't going to take it.

barney_1972

Thanks guys
Just had the amended credit agreement through offering loan without the loan protect!! Wahey

No mention of or option to have loan payed free through the BACS system though.

Red_Elle

I had a very similar experience to the first poster regarding taking out a loan. I got the hard sell on several occasions and refused the Loanprotect, only to have it sent through on the paperwork. I couldn't have been clearer about not wanting it, so suspect it was a deliberate mistake.
When I called to let them know I got the hard sell again, they were unbelievably rude and I complained. I've put that in writing to them, so will be interested to hear what they have to say.