Personal loan £20k <3%

[martin363]

Depends what the debt it for tbh. If you can service the loan no problem, it's really not an issue. Buying things with cash is a stupid thing to do, when rates are low. You can use the money to do more with, rather than on an item.
Someone I know just went out and spent 45k cash on a 2nd hand car. I would use the banks 100% for this. Low rates of paying back and that 45k could have easily gone into an investment to make you a decent return. It's just better money management.

The point is made above your statement. Debt is commitment. If you don't need to take debt, you are not committed or beholden, your are free. There is a lot of value in freedom. why commit yourself to responsibilities and legal repayment if you don't have to? I get your argument about investment and loan, but for most people, if you have money, and don't need debt, freedom from commitment is its own investment.

 

[Energize]

If it was 100% then you might well have just been declined one instead of being offered one with a higher rate and/or the average rate could be higher.

Easily rectified by saying loan applicants cannot be declined if they meet the conditions. My time is worth more than what was spent applying for the loan, and denying loans to people with good credit who can pay them off and giving them to people with bad credit who can't is precisely how the banks destroyed the economy.

 

[dowie]

Easily rectified by saying loan applicants cannot be declined if they meet the conditions. My time is worth more than what was spent applying for the loan, and denying loans to people with good credit who can pay them off and giving them to people with bad credit who can't is precisely how the banks destroyed the economy.

Eh? Loan applicants won't be declined if they don't have a reason to decline them. They offer you a rate because they're happy lending to you at that rate - if it is a higher rate then generally they see you as higher risk than the people they'd offer a loan to at a lower rate - if they didn't have the flexibility to offer those differing rates then you'd perhaps get declined or they'd give higher rates out across the board.

Forcing or strongly encouraging banks to lend to risky customers they wouldn't otherwise lend to isn't a good idea - we've already seen what happens when that goes wrong just over a decade ago.

 

[Fusion]

Someone I know just went out and spent 45k cash on a 2nd hand car. I would use the banks 100% for this. Low rates of paying back and that 45k could have easily gone into an investment to make you a decent return. It's just better money management.

Good money management probably doesn’t involve spending £45k on a car, unless it’s going to appreciate.

 

[touch]

Easily rectified by saying loan applicants cannot be declined if they meet the conditions. My time is worth more than what was spent applying for the loan

You didn't meet the conditions for the loan you applied for, so they offered you a loan with a higher interest rate that you did meet the conditions for.
You were not forced to take the loan at that point and the time you spent on the application wouldn't be any different whether they offered you the higher rate loan or just straight up declined. I can't see how declining people who don't meet the conditions for the loan saves them any time over offering an alternative instead?

 

[Energize]

Eh? Loan applicants won't be declined if they don't have a reason to decline them. They offer you a rate because they're happy lending to you at that rate - if it is a higher rate then generally they see you as higher risk than the people they'd offer a loan to at a lower rate - if they didn't have the flexibility to offer those differing rates then you'd perhaps get declined or they'd give higher rates out across the board.

Forcing or strongly encouraging banks to lend to risky customers they wouldn't otherwise lend to isn't a good idea - we've already seen what happens when that goes wrong just over a decade ago.

You didn't meet the conditions for the loan you applied for, so they offered you a loan with a higher interest rate that you did meet the conditions for.
You were not forced to take the loan at that point and the time you spent on the application wouldn't be any different whether they offered you the higher rate loan or just straight up declined. I can't see how declining people who don't meet the conditions for the loan saves them any time over offering an alternative instead?

No conditions were stated on the loan application, I am advocating that all loan applications that meet the stated conditions must be granted the headline rate, it saves time as people would not apply for loans with dodgy companies that advertise 3% and offer 20%.

Either state your loan conditions in an upfront transparent manner or don't offer the loan at all.

As it stands a credit card company offered me a 0% money transfer loan instead which I was able to profit from by stooging in a higher interest paying account and they were able to make a profit on by charging a 3% balance transfer fee, mutually beneficial while while the company offering an unethical 17% interest rate lost out, not hard to see how the banks destroyed out economy with such stupid practises.

 

[touch]

Either state your loan conditions in an upfront transparent manner or don't offer the loan at all

It would either need to be such a massive list of conditions to take into account all the possible different credit histories and statuses that would waste a lot more of your time or the conditions would have to be so vague that it's be meaningless because you wouldn't be able to work it out by yourself anyway.

 

[Energize]

It would either need to be such a massive list of conditions to take into account all the possible different credit histories and statuses that would waste a lot more of your time or the conditions would have to be so vague that it's be meaningless because you wouldn't be able to work it out by yourself anyway.

Generally the list of conditions is rather limited, to utilisation of available credit, amount of debt, past CCJ judgements and loan/card defaults.

Certainly there is no reason to offer someone with no past defaults 17% when they have a tiny credit utilisation, no debt, multiple contracts (phone/utilities etc.) and a relatively large income.

 

[touch]

Generally the list of conditions is rather limited, to utilisation of available credit, amount of debt, past CCJ judgements and loan/card defaults.

The conditions are not made public for obvious reasons but i'd guess there's more to it than that. I think at least it would also include intended use of the money, monthly income and outgoings, employment status, spouse/financially linked relationships.

Anyway, their decision will be based on a balance of all these conditions, not a fixed value like "anyone utilising more than 75% of available credit will be declined". Even if you knew all the rules, you probably wouldn't be able to work it out for yourself anyway.

 

[Hellsmk2]

Bit late to the party, so apologies if this has already been suggested, but could you not get a 0% balance transfer credit card instead? Bit of work to be done everytime the interest free period is up, but surely better than paying interest.

I still wouldn't consider either. Would recommend investing in some budgeting software instead, and save up. (www.ynab.com is pretty awesome).

 

[Minstadave]

Bit late to the party, so apologies if this has already been suggested, but could you not get a 0% balance transfer credit card instead? Bit of work to be done everytime the interest free period is up, but surely better than paying interest.

I still wouldn't consider either. Would recommend investing in some budgeting software instead, and save up. (www.ynab.com is pretty awesome).

I don't think credit cards often give you a 20k limit.

 

[dowie]

No conditions were stated on the loan application, I am advocating that all loan applications that meet the stated conditions must be granted the headline rate, it saves time as people would not apply for loans with dodgy companies that advertise 3% and offer 20%.

Either state your loan conditions in an upfront transparent manner or don't offer the loan at all.

The loans depend on your personal circumstance and their scoring of you too - that's not some rigid set of conditions they can just publish. It's also something they might want to adjust over time - you can't just force an institution to (potentially) lend unspecified amounts to anyone who qualifies etc... Its your choice to apply for a loan and or to accept what you get offered. It is their choice to set rates etc..

Again though, if you were rejected a loan at the headline rate and offered an alternative but you don't like the fact you were offered an alternative loan at a higher rate then if forced they might as well just reject you... as it happens you had the option to take another loan and indeed turn that down.

 

[Energize]

The loans depend on your personal circumstance and their scoring of you too - that's not some rigid set of conditions they can just publish. It's also something they might want to adjust over time - you can't just force an institution to (potentially) lend unspecified amounts to anyone who qualifies etc... Its your choice to apply for a loan and or to accept what you get offered. It is their choice to set rates etc..

Again though, if you were rejected a loan at the headline rate and offered an alternative but you don't like the fact you were offered an alternative loan at a higher rate then if forced they might as well just reject you... as it happens you had the option to take another loan and indeed turn that down.

It's a mathematical algorithm, of course it's a set of criteria they can publish! There is nothing more black and white than mathematics.

If one is paid £50 an hour and they spend an hour applying for a loan they should be compensated for the time wasted for the loan company not honouring the headline rates. How can someone defend such immorality?

Transparency is crucial in the financial industry, either stick to a rigid set of terms and conditions or be fined!

 

[dowie]

It's a mathematical algorithm, of course it's a set of criteria they can publish! There is nothing more black and white than mathematics.

If one is paid £50 an hour and they spend an hour applying for a loan they should be compensated for the time wasted for the loan company not honouring the headline rates. How can someone defend such immorality?

Transparency is crucial in the financial industry, either stick to a rigid set of terms and conditions or be fined!

That isn't necessarily how it works though, again:

"It's also something they might want to adjust over time - you can't just force an institution to (potentially) lend unspecified amounts to anyone who qualifies etc... Its your choice to apply for a loan and or to accept what you get offered. It is their choice to set rates etc.."

Its not necessarily as simple as - just publish it... also it's not really going to be in a form that is easily digestible or understood by the typical customer in the first place.

Its your choice to apply for the loan and your choice whether to accept what they have to offer you. I'm not sure on what basis you can simply fine them.... other than just getting miffed because they don't wish to lend to you at X rate.

As for their terms and conditions, those generally are transparent.

 

[Energize]

That isn't necessarily how it works though, again:

"It's also something they might want to adjust over time - you can't just force an institution to (potentially) lend unspecified amounts to anyone who qualifies etc... Its your choice to apply for a loan and or to accept what you get offered. It is their choice to set rates etc.."

Its not necessarily as simple as - just publish it... also it's not really going to be in a form that is easily digestible or understood by the typical customer in the first place.

Its your choice to apply for the loan and your choice whether to accept what they have to offer you. I'm not sure on what basis you can simply fine them.... other than just getting miffed because they don't wish to lend to you at X rate.

As for their terms and conditions, those generally are transparent.

It is very trivial to create a calculator for loan acceptance.

The only reason you would not do this is to create a deception.

 

[dowie]

It is very trivial to create a calculator for loan acceptance.

The only reason you would not do this is to create a deception.

Nope that isn't the only reason you'd not do this. They're not just offering you a different rate just to troll you or for fun etc..

 

[Energize]

Nope that isn't the only reason you'd not do this. They're not just offering you a different rate just to troll you or for fun etc..

You still haven't provided an explanation as to why someone withold such crucial acceptance data. Generally the simplest explanation is the most rational one...

 

[touch]

You still haven't provided an explanation as to why someone withold such crucial acceptance data. Generally the simplest explanation is the most rational one...

1. Because people will lie about their circumstances to get the money.
2. The rules also depend on how many other loans they have and what risk level those are at. Do you want them to also publish their entire loan book along with the rules?
3. If your time is too valuable to you to spend doing a loan application, don't use it doing loan applications.

 

[dowie]

You still haven't provided an explanation as to why someone withold such crucial acceptance data. Generally the simplest explanation is the most rational one...

Because it isn’t necessarily a simple explanation but rather down to how they’ve scored you etc... how much they’re willing to lend and at what rates at some point in time etc..

 

[Psycho Sonny]

It's a mathematical algorithm, of course it's a set of criteria they can publish! There is nothing more black and white than mathematics.

If one is paid £50 an hour and they spend an hour applying for a loan they should be compensated for the time wasted for the loan company not honouring the headline rates. How can someone defend such immorality?

Transparency is crucial in the financial industry, either stick to a rigid set of terms and conditions or be fined!

it includes a credit check and your current amount of credit available as well as any defaults or late payments you may have had.

this is stuff which involves a hard search on your file when being offered. it's not just a excel spreadsheet.