Sold product at higher rate

[CornishPasty]

Hi gang,

About seven years ago I took out a secure loan for about £15k from a company for a variety of things. This was at an APR of abou 8%.

About five years ago I needed more money in a hurry. They suggested the only way they could help was to take a new loan for £25k to clear the old loan as I couldn't have two secured loans on the property with the same company.

They sold me the new loan at 10%. So my initial £15k was now being charged at 10% instead of the 8%.

I imagine this is merely greedy and opportunistic as opposed to illegal?

Cheers

[leclerc]

Re: Sold product at higher rate

Hi gang,

About seven years ago I took out a secure loan for about £15k from a company for a variety of things. This was at an APR of abou 8%.

About five years ago I needed more money in a hurry. They suggested the only way they could help was to take a new loan for £25k to clear the old loan as I couldn't have two secured loans on the property with the same company.

They sold me the new loan at 10%. So my initial £15k was now being charged at 10% instead of the 8%.

I imagine this is merely greedy and opportunistic as opposed to illegal?

Cheers

No it's called market forces. You surely do not expect them to keep loan rates at the same level forever, do you? Not everything that a company does is greedy and opportunistic(most of it is) but the cost of getting funds can go up and down depending on what the market is like at the time the loan is done.

If you are looking at a complaint over this then I think there may well be other things that you should look at, cos this one is not one of them IMHO.

[CornishPasty]

Re: Sold product at higher rate

Hiya,

No I recognise that rates change. I just wondered if it was ethical for the same lender to consolidate one debt by offering a loan at a higher rate INSTEAD of just offering the additional funds at the higher rate and leaving the original loan as was.

But then there was the claim that I couldn't have two loans from the same lender.

[leclerc]

Re: Sold product at higher rate

Hiya,

No I recognise that rates change. I just wondered if it was ethical for the same lender to consolidate one debt by offering a loan at a higher rate INSTEAD of just offering the additional funds at the higher rate and leaving the original loan as was.

But then there was the claim that I couldn't have two loans from the same lender.

Unfortunately this is the unethical bit of banking When you are offered money it is effective with strings attached ie that it is more money but a brand new agreement for the whole amount which repays the old agreement and gives you that little bit more....

[Bill-K]

Re: Sold product at higher rate

I can see CP's logic, but I must agree with Leclerc, in that the consolidation loan was an entirely new agreement and negotiated at whatever market rate current. The original loan was settled by this, and thus the contract was fulfilled or terminated (may not be correct terminology - sorry !)

I have to ask, though, CP - was there PPI on the loan(s) ? :beagle:

[CornishPasty]

Re: Sold product at higher rate

Damn it, no! LOL! I wish (now)!