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At what point is a loan considered to be 'taken out?'
I am about to take out a large loan for home improvements & notice that the 'Rule of 78' is about to disappear in May. I applied to Northern Rock on 24 April, they made an offer on 25 April but I don't intend to accept until May 2. Will it be liable to the Rule of 78 or not?? Jolly good interest rate but if Rule of 78 applies it won't be so good as we may consolidate with our mortgage when this is due for renewal in December (currently capped at 3.8% - WOW - so don't want to change it early).
Any ideas???
Very confused first time poster
Thanks
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Comments
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Just applying a little logic, it's when you accept, by signing & returning, the terms & conditions. NR have made you an offer, as set out in the letter of 25 April. If that includes Rule of 78 then if you accept that offer, Rule of 78 will apply.
I rather suspect that any change in the law will only apply to offers issued after May 1. Otherwise, all offers issued before that date would become null & void & would need to be reissued. This would annoy those people who had accepted and already signed & returned the paperwork.
Where did you read that Rule of 78 is definitely being banned?Warning ..... I'm a peri-menopausal axe-wielding maniac
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i would assume the same as chick, but maybe you could call them and ask them to cancel the old offer and issue a new offer dated may if it's definite that the rule wouldn't apply when the new offer was made.52% tight0
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thanks debt_free_chick & jellyhead for the advice. You're right, I need a new loan offer dated after 1 May (why is good thinking so often done by someone else??). The news about the rule of 78 is in MSE loans info page, so I'm sure it's right.0
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