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  • FIRST POST
    • smirnofffff
    • By smirnofffff 17th Jun 19, 12:13 AM
    • 2Posts
    • 0Thanks
    smirnofffff
    Warning - Creation finance
    • #1
    • 17th Jun 19, 12:13 AM
    Warning - Creation finance 17th Jun 19 at 12:13 AM
    I applied for a creation finance loan to consolidate my debts as they sent me an offer for 7.9% loan.

    I got the paperwork today and on a closer look its 20.9% apr and with added fees etc for a 10,000 loan over 48 months they would charge me 14,385.
    That's nearly 50% on top of what i would be borrowing... Surely its not legal for them to try and dupe people into such things is it?
Page 1
    • fiestaman87
    • By fiestaman87 17th Jun 19, 4:23 AM
    • 71 Posts
    • 162 Thanks
    fiestaman87
    • #2
    • 17th Jun 19, 4:23 AM
    • #2
    • 17th Jun 19, 4:23 AM
    Did you check the T&Cs when you applied? Did it say from 7.9%?

    It is just possible that you may not have been accepted for the advertised rate and been given a higher rate.

    If you do not want this deal you should have a cooling off period - again check the T&Cs.

    I hope this helps.
    Total Savings: AA 100.00, HSBC 500.00, Marcus 1,021.85, Nationwide 2,500.00, TSB 1,500.00, Virgin Money 3,500.19 - Total 9122.04
    Save 12k in 2019 Challenge - 4.856.81
    Total Debt: Barclaycard (0% APR) 2,550.00, Santander CC (0% APR) 3,800.00, Santander Loan (3% - for car) 3,285.35, Mortgage 48,881.71 (1.5% APR) - Total 58,517.06
    • Dobbibill
    • By Dobbibill 17th Jun 19, 5:10 AM
    • 3,745 Posts
    • 5,050 Thanks
    Dobbibill
    • #3
    • 17th Jun 19, 5:10 AM
    • #3
    • 17th Jun 19, 5:10 AM
    Possibly says 'from' - as stated above.

    Rather than borrow your way out of debt why don't you pop over to the DFW board and post a SOA.

    The good forum members may be able to offer alternative solutions, hints and tips that doesn't involve consolidation - which rarely works.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


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    It's about being better than you were yesterday.
    • Kentish Dave
    • By Kentish Dave 17th Jun 19, 6:10 AM
    • 411 Posts
    • 638 Thanks
    Kentish Dave
    • #4
    • 17th Jun 19, 6:10 AM
    • #4
    • 17th Jun 19, 6:10 AM
    They really are not trying to dupe you, they make it very clear that the headline rate is representative and that the rate which you will get depends on your personal circumstances.
    • fatbelly
    • By fatbelly 17th Jun 19, 6:19 AM
    • 13,960 Posts
    • 10,993 Thanks
    fatbelly
    • #5
    • 17th Jun 19, 6:19 AM
    • #5
    • 17th Jun 19, 6:19 AM
    I think the headline rate has to be offered to 50% of applicants.

    With a load of debt already, you were unlikely to be in that 50%
    • foxy-stoat
    • By foxy-stoat 17th Jun 19, 8:12 AM
    • 4,621 Posts
    • 2,736 Thanks
    foxy-stoat
    • #6
    • 17th Jun 19, 8:12 AM
    • #6
    • 17th Jun 19, 8:12 AM
    I applied for a creation finance loan to consolidate my debts as they sent me an offer for 7.9% loan.

    I got the paperwork today and on a closer look its 20.9% apr and with added fees etc for a 10,000 loan over 48 months they would charge me 14,385.
    That's nearly 50% on top of what i would be borrowing... Surely its not legal for them to try and dupe people into such things is it?
    Originally posted by smirnofffff
    You really should rename your title to "warning already read the agreement before signing".

    Hats off for doing just that, so many people don't then wonder why 6 months in they work out how much the interest rate is, or reading the agreement.

    Nothing illegal has happened here.
    • MEM62
    • By MEM62 17th Jun 19, 9:31 AM
    • 2,504 Posts
    • 2,156 Thanks
    MEM62
    • #7
    • 17th Jun 19, 9:31 AM
    • #7
    • 17th Jun 19, 9:31 AM
    I applied for a creation finance loan to consolidate my debts as they sent me an offer for 7.9% loan.

    I got the paperwork today and on a closer look its 20.9% apr and with added fees etc for a 10,000 loan over 48 months they would charge me 14,385.
    That's nearly 50% on top of what i would be borrowing... Surely its not legal for them to try and dupe people into such things is it?
    Originally posted by smirnofffff
    Not sure why you feel that this is an attempt to dupe you. The rate is shown on the paperwork in a manner that is clear enough for you to have seen it. Most loan adverts show the 'headline' rate and it is noted in the application that the rate you get will depend in your circumstances.

    In more general terms, if you are getting offered loans at 20% interest rates you need to accept the message that it is time for you to stop borrowing money. Consolidation loans do not work - you cannot borrow your way out of debt.

    You'll need an alternative strategy of dealing with your debts. The DFW board will have lots of advice available if you post an SOA.
    • DCFC79
    • By DCFC79 17th Jun 19, 10:34 AM
    • 34,569 Posts
    • 21,868 Thanks
    DCFC79
    • #8
    • 17th Jun 19, 10:34 AM
    • #8
    • 17th Jun 19, 10:34 AM
    I applied for a creation finance loan to consolidate my debts as they sent me an offer for 7.9% loan.

    I got the paperwork today and on a closer look its 20.9% apr and with added fees etc for a 10,000 loan over 48 months they would charge me 14,385.
    That's nearly 50% on top of what i would be borrowing... Surely its not legal for them to try and dupe people into such things is it?
    Originally posted by smirnofffff

    Its perfectly fine, as mentioned it should say "from" in the t&c's. No 1 is being duped, you apply and they offer you a loan at x amount and the customer has the choice to take up the offer or go elsewhere so no duping is going on here.


    Duped is where you would apply for a loan and get offered the amount and told its at 5% and you later find out its actually 14.9%, now that's actually being duped.


    You do know consolidation is a risky move ?


    What reason did you say the loan was for ?


    If you said consolidation then maybe that's why the rate was upped.
    Have you asked them why it was increased ?
    Last edited by DCFC79; 17-06-2019 at 10:37 AM.
    • foxy-stoat
    • By foxy-stoat 17th Jun 19, 3:35 PM
    • 4,621 Posts
    • 2,736 Thanks
    foxy-stoat
    • #9
    • 17th Jun 19, 3:35 PM
    • #9
    • 17th Jun 19, 3:35 PM
    I get the same pre-approved letter from Creation every month, ever since I bought a sofa on interest free credit.

    Its a guaranteed pre-approved rate of 7.9%* blah blah blah.


































































    * Subject to status and credit check.
    • Somerset La La La
    • By Somerset La La La 18th Jun 19, 1:30 PM
    • 738 Posts
    • 255 Thanks
    Somerset La La La
    I get the same pre-approved letter from Creation every month, ever since I bought a sofa on interest free credit.

    Its a guaranteed pre-approved rate of 7.9%* blah blah blah.
    Originally posted by foxy-stoat
    Bold bits - That's incredibly unfair and misleading, that must be borderline in terms of TCF compliance!? Especially considering the repetitive nature of the 'offer'.

    Good job the OP actually read the terms, I know many people are just so glad to be approved for what they asked for, they sign and return (or e-sign) without even checking properly!
    Work in Underwriting (Mortgages) - posts are my opinion/experience etc, not official company policy/lending rules.

    Only the underwriter assigned to a case at full application stage can give a 100% definitive answer to queries
    • foxy-stoat
    • By foxy-stoat 19th Jun 19, 8:09 AM
    • 4,621 Posts
    • 2,736 Thanks
    foxy-stoat
    Bold bits - That's incredibly unfair and misleading, that must be borderline in terms of TCF compliance!? Especially considering the repetitive nature of the 'offer'.

    Good job the OP actually read the terms, I know many people are just so glad to be approved for what they asked for, they sign and return (or e-sign) without even checking properly!
    Originally posted by Somerset La La La
    I know, I just bin the letters I get. I also know that no loan is pre-approved without a credit check, unless the interest rate is 50%.
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