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  • FIRST POST
    • ollirian
    • By ollirian 17th Apr 18, 7:39 PM
    • 33Posts
    • 1,089Thanks
    ollirian
    Nationwide Loan - 23.9% APR
    • #1
    • 17th Apr 18, 7:39 PM
    Nationwide Loan - 23.9% APR 17th Apr 18 at 7:39 PM
    I applied for a 12,000 loan with Nationwide in 2012.
    It was a ridiculously high 23.9% APR loan on a 7-year term.

    I needed it for a debt consolidation loan and at the time still had a decent credit score.

    I was advised by the person at the branch that signed me up that I could always reapply for a lower APR loan with a 9-12 month repayment history in good standing.

    After 3 attempts to reduce the APR with a new loan with Nationwide, I gave up.


    I now have 17 months to pay the outstanding balance.

    I up to very recently had no problems making monthly payments.

    Last November and December I could not make payments for the first time.

    I tried to pay off the arrears with the usual monthly amounts in January and February but much to my surprise I was told that Nationwide was charging me an interest on the outstanding of 1.50 a day.

    This has now doubled my monthly outstanding.
    I called Nationwide to review and wave the additional interest charged, having paid off monthly outstandings with no issues for 67 months in a row.

    They brick-walled me saying there was nothing they can do.
    I have just raised a formal complaint about the ridiculously high-APR higher than the APR on all of credit cards I hold.

    After the formal complaint, I want to escalate this issue to the Financial Ombudsman.

    Does anyone have any similar experience?
    This is really extortionate.

    I agree that the decision to take out a 23.9% loan was mine.
    BUT should a Building Society or High Street bank be allowed to issue loans at such a high APR - should there not be a cap.

    How ethical is this rate?
    The responsible thing Nationwide should have done was to have turned me down.

    After 84 months, I will have paid Nationwide about 24,000 for a a 12,000 loan.

    How ethical is this?
Page 1
    • venison
    • By venison 17th Apr 18, 7:50 PM
    • 2,036 Posts
    • 2,187 Thanks
    venison
    • #2
    • 17th Apr 18, 7:50 PM
    • #2
    • 17th Apr 18, 7:50 PM
    Any lender can charge whatever APR the deem fit, you say you had a decent "credit score" that means nothing only you see it. Did you have a good credit "history" at the time?

    Debt consolidation is never a good idea as you are now finding out.
    I'm not sure what you are looking for or what you expect the ombudsman to do?
    Ex Board Guide
    • financegeek
    • By financegeek 17th Apr 18, 7:53 PM
    • 19 Posts
    • 21 Thanks
    financegeek
    • #3
    • 17th Apr 18, 7:53 PM
    • #3
    • 17th Apr 18, 7:53 PM
    Hi Ollirian

    Nationwide wouldn't have provided any advice on the application, so you can't 'blame' them as such that you took out he loan. You were aware of the APR at the time of signing and were seemingly happy with it. it was also obviously affordable at the time as you've made payments for the last 6 years.

    What does your agreement say about additional interest? or is the 1.50 a day your standard interest based on the capital outstanding and arrears?

    I don't think you'll be successful claiming the APR is extortionate, as you agreed to it at the time. If you're struggling with payments have you advised Nationwide of this and asked them for assistance? or did you just call to say you didn't agree with the interest rate being charged?

    Nationwide have a duty to work with you if you're struggling. if you're then not happy with their response you can make a formal complaint and if necessary go to the FOS.

    What do you want from the complaint though? You're not going to get compensation / the loan written off, so you're probably better off working with the lender to try and find a way forward rather than battling with them for an result that won't end in your favour.
    • BoGoF
    • By BoGoF 17th Apr 18, 8:09 PM
    • 3,117 Posts
    • 2,389 Thanks
    BoGoF
    • #4
    • 17th Apr 18, 8:09 PM
    • #4
    • 17th Apr 18, 8:09 PM
    After 84 months, I will have paid Nationwide about 24,000 for a a 12,000 loan.

    How ethical is this?
    Originally posted by ollirian
    So has it taken you this long to realise this?

    Did you read the loan agreement?

    Nationwide have done nothing wrong here so dont go wasting FOS time. If you want to see an extortionate rate take a look at some of the loan adverts on daytime tv.
    • enthusiasticsaver
    • By enthusiasticsaver 17th Apr 18, 8:09 PM
    • 6,377 Posts
    • 13,026 Thanks
    enthusiasticsaver
    • #5
    • 17th Apr 18, 8:09 PM
    • #5
    • 17th Apr 18, 8:09 PM
    The ombardsman cannot do anything as Nationwide have done nothing wrong. 23.9% is a high rate but there are loans which charge higher.

    You presumably signed an agreement for this and have been paying it for more than 5 years so you cannot claim you did not realise the rate you were paying.

    Undoubtedly it is recorded somewhere in terms and conditions the 1.50 per day interest charge on missed payments.

    Take this as a life lesson to sort out your finances and don't consolidate lending in the future. It always works out more expensive and does not help you learn to live within a budget.

    In the meantime contact Nationwide and try to come to an affordable arrangement.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • BoGoF
    • By BoGoF 17th Apr 18, 8:15 PM
    • 3,117 Posts
    • 2,389 Thanks
    BoGoF
    • #6
    • 17th Apr 18, 8:15 PM
    • #6
    • 17th Apr 18, 8:15 PM
    And it seems you have made the fatal mistake of wracking up further debt after consolidation if the rate is "higher than the APR on all of credit cards I hold". Is this the reason you could no longer afford it?
    • DCFC79
    • By DCFC79 17th Apr 18, 8:35 PM
    • 31,601 Posts
    • 19,942 Thanks
    DCFC79
    • #7
    • 17th Apr 18, 8:35 PM
    • #7
    • 17th Apr 18, 8:35 PM
    I applied for a 12,000 loan with Nationwide in 2012.
    It was a ridiculously high 23.9% APR loan on a 7-year term.

    I needed it for a debt consolidation loan and at the time still had a decent credit score.

    I was advised by the person at the branch that signed me up that I could always reapply for a lower APR loan with a 9-12 month repayment history in good standing.

    After 3 attempts to reduce the APR with a new loan with Nationwide, I gave up.


    I now have 17 months to pay the outstanding balance.

    I up to very recently had no problems making monthly payments.

    Last November and December I could not make payments for the first time.

    I tried to pay off the arrears with the usual monthly amounts in January and February but much to my surprise I was told that Nationwide was charging me an interest on the outstanding of 1.50 a day.

    This has now doubled my monthly outstanding.
    I called Nationwide to review and wave the additional interest charged, having paid off monthly outstandings with no issues for 67 months in a row.

    They brick-walled me saying there was nothing they can do.
    I have just raised a formal complaint about the ridiculously high-APR higher than the APR on all of credit cards I hold.

    After the formal complaint, I want to escalate this issue to the Financial Ombudsman.

    Does anyone have any similar experience?
    This is really extortionate.

    I agree that the decision to take out a 23.9% loan was mine.
    BUT should a Building Society or High Street bank be allowed to issue loans at such a high APR - should there not be a cap.

    How ethical is this rate?
    The responsible thing Nationwide should have done was to have turned me down.

    After 84 months, I will have paid Nationwide about 24,000 for a a 12,000 loan.

    How ethical is this?
    Originally posted by ollirian
    Nothing wrong with the rate offered which you accepted.

    You had a choice to decline the offer and reduce your outgoings or take on a second job.

    The rate isnt the best, it isn't extortionate though, maybe the high rate is a result of the option you chose for loan.
    Last edited by DCFC79; 17-04-2018 at 8:39 PM.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • ollirian
    • By ollirian 17th Apr 18, 11:21 PM
    • 33 Posts
    • 1,089 Thanks
    ollirian
    • #8
    • 17th Apr 18, 11:21 PM
    • #8
    • 17th Apr 18, 11:21 PM
    Thank you for all your responses.
    As I alluded to in my initial message - I take responsibility for taking out the loan.
    With that being said, I am still firm on the following points.

    High street banks and building societies should have a cap on loan APRs as a matter of ethics in order to stop unaffordable lending, I think a fair point is a maximum of 15% APR.

    I reached out to Nationwide to waive off the interest accrued over 2 months in a bid to get my account in good standing. This was not too much of an ask given my history with them.
    • badmemory
    • By badmemory 18th Apr 18, 12:30 AM
    • 1,603 Posts
    • 2,102 Thanks
    badmemory
    • #9
    • 18th Apr 18, 12:30 AM
    • #9
    • 18th Apr 18, 12:30 AM


    I reached out to Nationwide to waive off the interest accrued over 2 months in a bid to get my account in good standing. This was not too much of an ask given my history with them.
    Originally posted by ollirian
    They obviously did think it was too much to ask. I can't say I blame them. Why do you think they should change their T&Cs to suit what you want? They can't change their terms & conditions to say well badmememory I know we promised you X% return on your savings but as we are letting ollirian off paying all HE owes we are going to cut that by half.
    • Tarambor
    • By Tarambor 18th Apr 18, 1:10 AM
    • 2,832 Posts
    • 2,045 Thanks
    Tarambor
    Thank you for all your responses.
    As I alluded to in my initial message - I take responsibility for taking out the loan.
    With that being said, I am still firm on the following points.

    High street banks and building societies should have a cap on loan APRs as a matter of ethics in order to stop unaffordable lending, I think a fair point is a maximum of 15% APR.
    Originally posted by ollirian
    Debt consolidation loans are a risk, you've proven why. Because they're a higher risk of default they come with a higher APR.

    If there was a cap put on High St bank APRs then quite simply what will happen is they'll stop lending to people like yourself who are a high risk. What position would you have been in over the last half decade had you not been able to get a consolidation loan with Nationwide at 23.9% APR, a Payday loan at 2390% APR? Would you have been bankrupt by now?
    • PeacefulWaters
    • By PeacefulWaters 18th Apr 18, 8:51 AM
    • 8,320 Posts
    • 10,637 Thanks
    PeacefulWaters

    High street banks and building societies should have a cap on loan APRs as a matter of ethics in order to stop unaffordable lending, I think a fair point is a maximum of 15% APR.
    Originally posted by ollirian
    So you'd deny those with expensive but affordable credit cards, like Aqua or Marbles, the right to consolidate to a far cheaper rate?

    Not very ethical of you.
    • iolanthe07
    • By iolanthe07 18th Apr 18, 11:49 AM
    • 5,011 Posts
    • 4,706 Thanks
    iolanthe07
    23.9% is high, but there are a lot higher rates out there. Nationwide assessed your risk profile and made an offer which you were free to decline or accept. The fact that you now regret accepting it is not their fault.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • ollirian
    • By ollirian 18th Apr 18, 11:58 AM
    • 33 Posts
    • 1,089 Thanks
    ollirian
    Thank you for all the comments.
    I take responsibility for my situation.

    I still believe they should be little more cooperative based on my history as a customer with them.

    I have negotiated overdraft fees in the past.
    • BoGoF
    • By BoGoF 18th Apr 18, 12:16 PM
    • 3,117 Posts
    • 2,389 Thanks
    BoGoF
    Thank you for all the comments.
    I take responsibility for my situation.

    I still believe they should be little more cooperative based on my history as a customer with them.

    I have negotiated overdraft fees in the past.
    Originally posted by ollirian
    And they obviously believe you should pay what you signed up for.

    You havent said why you had difficulty paying in November/December - what changed?
    • bigisi
    • By bigisi 18th Apr 18, 12:32 PM
    • 180 Posts
    • 338 Thanks
    bigisi
    I take responsibility for my situation.
    Originally posted by ollirian
    Except you clearly don't and want to blame Nationwide as evidenced in all your posts in this thread.

    It's your fault you took the high APR loan. It's your fault you missed payments. Nationwide agreed by providing you with the loan that you could borrow the amount you borrowed at the APR you agreed and were happy with. They've held up their side of the deal, you haven't and now expect them to bend over backwards for you. They're a business, not your friend.

    I have negotiated overdraft fees in the past.
    Originally posted by ollirian
    Irrelevant. Nationwide's money = Nationwide's rules.
    • ReadingTim
    • By ReadingTim 18th Apr 18, 12:56 PM
    • 2,647 Posts
    • 3,782 Thanks
    ReadingTim
    Thank you for all the comments.
    I take responsibility for my situation.

    I still believe they should be little more cooperative based on my history as a customer with them.

    I have negotiated overdraft fees in the past.
    Originally posted by ollirian
    Why? Part of the rate includes making a profit for their shareholders (or, in the case of Nationwide, their members). So you're essentially asking a profit making organisation not to make profit - where's the logic in that? There isn't any.

    Furthermore, regardless of how good a customer you think you are
    (merely making the payments you agreed to make ain't special, while missing payment on the only loan you've had with them doesn't seem like good customer behaviour to me...), any sort of loyalty bonus is entirely at their discretion - you have no right to it.

    Suggest you spend your time and energies rectifying whatever caused the repayment problems and get the loan back on track, rather than blaming Nationwide for everything...
    • enthusiasticsaver
    • By enthusiasticsaver 18th Apr 18, 1:33 PM
    • 6,377 Posts
    • 13,026 Thanks
    enthusiasticsaver
    The best way to beat these banks is not to borrow. Sort out your finances so you are not in need of these loans at high rates.

    Financial services is a competitive market place so there is no way borrowing rates will be capped. The alternative is anyone with a less than perfect credit record will not be able to borrow at all. 23.9% is not the highest rate for borrowing.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • ollirian
    • By ollirian 18th Apr 18, 7:16 PM
    • 33 Posts
    • 1,089 Thanks
    ollirian
    The best way to beat these banks is not to borrow. Sort out your finances so you are not in need of these loans at high rates.

    Financial services is a competitive market place so there is no way borrowing rates will be capped. The alternative is anyone with a less than perfect credit record will not be able to borrow at all. 23.9% is not the highest rate for borrowing.
    Originally posted by enthusiasticsaver

    Thank you - most help and empathetic response here.
    Thanks to everyone here for the tough love.
    Lessons learnt and part of being grown up.
    • nic_c
    • By nic_c 18th Apr 18, 8:33 PM
    • 1,446 Posts
    • 791 Thanks
    nic_c
    If you have credit cards with lower APR you would be better spending on them and using the cash you would have used to pay your loan down. You could even see if existing cards would give you a promo rate for a money transfer.
    • Clive Woody
    • By Clive Woody 19th Apr 18, 1:05 PM
    • 4,447 Posts
    • 5,057 Thanks
    Clive Woody
    Thank you - most help and empathetic response here.
    Thanks to everyone here for the tough love.
    Lessons learnt and part of being grown up.
    Originally posted by ollirian
    Can I suggest you get onto the Debt Free board on here as there will be many who have been through the same circumstances and will be able to help you manage your debt.

    First thing is normally to post a Statement Of Affairs (SOA) and go from there to see where you can save money to clear your debt quicker.

    No more loans, deal with your debt and live debt free. Good luck
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