Is Cahoot really cheapest flexible unsecured loan??

Milky_Mocha

I am thinking of taking out a flexible unsecured uninsured loan of £20,000

What are the chances of being offered a loan of that amount unsecured? Has anyone done this and got the best rate? My credit rating is quite high (ninety-something percent) and I have several settled accounts including credit cards, a mobile phone contract and storecards. However I have existing debts of about £14k (3 cards all 0% till Nov / Dec + 1 loan balance of c. £5k) and hope to use most of the loan to pay this off when the 0%s end.

Also I read Martin's article which stated



"Cahoot* also offers the cheapest flexible loan, currently at 6.9%. As it’s flexible, you may overpay to get rid of the debt more quickly and underpay when you’re short."


However the same article mentions under 'easier to obtain cheap loans':


"An alternative is Liverpool Victoria’s* slightly cheaper 6.5% loan Unfortunately its rate is ‘typical’ not guaranteed, but the benefit is that if you’re border line, it may refer you to a manual assessment instead of rejecting you; it’s worth having a punt."


Is the Liverpool Victoria one not flexible? What about Nationwide's guaranteed 6.7%? If that is flexible I'd be most comfortable as I won't have to fret when rates rise.

Thank you

Luke

The nationwide one at 6.7 is not trully flexible, but it does allow you extra payments unlike many banks. So it depends what your priority is, to be able to take payment holidays or make over payments.

jonesMUFCforever

Lloyds tsb will have a loan at 6.4% wef 1/09/05 for their best creditworthy customers.
Eric

Milky_Mocha

Luke wrote:

The nationwide one at 6.7 is not trully flexible, but it does allow you extra payments unlike many banks. So it depends what your priority is, to be able to take payment holidays or make over payments.

I don't really care for payment holidays but then looking at it again 6.7% does seem quite high. I'd consider the fixed rate but then it would take me a long time to build up the overpayments in a savings account to pay it off. Plus I received an email from cahoot indicating that they charge interest anyway when you pay off a balance. Has anyone else received this? I find it hard to believe that the FSA would allow such a clause.

Milky_Mocha

ejones999 wrote:

Lloyds tsb will have a loan at 6.4% wef 1/09/05 for their best creditworthy customers.
Eric

Thats flexible is it? I'll look into it.

jonesMUFCforever

Milky_Mocha wrote:

Thats flexible is it? I'll look into it.

How do you define flexible?
Can you make overpayments - yes
Can you repay early - yes with early settlement fee of 2 months interest.
Does that answer your questions?
Eric

Milky_Mocha

ejones999 wrote:

How do you define flexible?
Can you make overpayments - yes
Can you repay early - yes with early settlement fee of 2 months interest.
Does that answer your questions?
Eric

Cheers Eric. By flexible I want to make overpayments. However if someone is making overpayments doesn't it mean he/she is settling early anyway? Hence you'd end up paying a settlement fee regardless?

I just got a 'sale' offer from Sainsburys bank offering 6.5% plus 5000 nectar points. I think this is it. I'll check out the t's and c's

jonesMUFCforever

Milky_Mocha wrote:

Cheers Eric. By flexible I want to make overpayments. However if someone is making overpayments doesn't it mean he/she is settling early anyway? Hence you'd end up paying a settlement fee regardless?

I just got a 'sale' offer from Sainsburys bank offering 6.5% plus 5000 nectar points. I think this is it. I'll check out the t's and c's

No there is a way to avoid paying the 2 month interest penalty. All you do is pay off what is owing less £50. After the payment is processed then pay off the balance (2 months interest on £50 will at most be pennies) or let the next repayment go through and wait for a refund of your overpayment.
Eric

Rafter

Amazing how people have got used to describing a 6.9% totally flexible unsecured loan as being a 'high' interest rate!

Bank base rates are currently 4.5% and standard mortgage rates are usually about 1-1.5% above this, somewhere between 5.5% and 6%. That is for a secured loan over 25 years where the bank has lower risk of bad debt.

The only reason the likes of Northern Rock can offer <6% loans is that they flog payment protection insurance very heavily which adds around 5%+ to the cost of the loan, and that is even before their sneaky £45 charge for transferring the loan via chaps.

The difference between the interest cost on a £20,000 loan over 5 years between a 5.9% APR loan and a 6.9% flexible loan is approximately £100 or £1.67 a month - a small price for flexibility in my opinion. Knock off the £45 charge and 2 month penalty interest for early settlement (about £100) and suddenly these deals don't seem such good value - which they are not!

R.

PS - Remember the interest rate on a credit card is anywhere between 6.9% for the no-hassle cards to 16% for cards with 0% offers too.