Loan

[saint_stevo]

Ok so i have a loan and still owe a couple of grand on it, it is with Alliance and Leicester @ 6.9% APR.

 

Phone up yesterday asking to take a £5k loan, paying off my balance and then having some dough to replace the problematic golf....

Was offered 11.9% APR (standard rate is 8.9%) and monthly repayments going up £40.

 

How is this possible when interest rates are at an all time low? I have kept up every payment and never had any credit issues, so why the inflated interest compared to standard?

 

Not happy. Anyone got a loan at a decent % APR recently?

[hamster]

Ok so i have a loan and still owe a couple of grand on it, it is with Alliance and Leicester @ 6.9% APR.

 

Phone up yesterday asking to take a £5k loan, paying off my balance and then having some dough to replace the problematic golf....

Was offered 11.9% APR (standard rate is 8.9%) and monthly repayments going up £40.

 

How is this possible when interest rates are at an all time low? I have kept up every payment and never had any credit issues, so why the inflated interest compared to standard?

 

Not happy. Anyone got a loan at a decent % APR recently?

 

Bear with me here stevo.

 

I must stress that this is only my opinion, but within the next 6-12 months I reckon the housing market will bottom out properly. It will be the best time for over a decade to buy property. I don't just mean the last decade, I also mean the next decade. Prices will increase month on month, year on year. Prices will increase due to worth of the house increasing next time. The cost of something is not anything to do with the worth of it.

 

Example: A £50 pick axe is worth more than £50 if you are using it to dig for diamonds, A £50 pickaxe is worth nothing if it is going to sit in your shed, but the salesman will still sell it to you on the basis of what it is worth to him in commision whatever it is worth to you though.

 

Last time prices increased because of the fact that everyone who made a commision on the sale, the conveyancing, and worst of all the banks were making money hand over fist. The ONLY way for people to have got any perceived value was to sell and thus keep the myth going. Again, I stress that this is my opinion, but the people who are really crying into their cornflakes are the banks aren't they. Watch the swines whack the interest rates up agian in a flash the moment there's a glimmer of light at the end of the tunnel.

 

Stevo, I would suggest that if you don't have a mortgage, NOW is the time to start looking to buy. You will get a great deal and you will be ahead of the game. If I could find a few quid for the deposit I would love to get into the rental market now aswell. If you get into a loan deal now, you could really regret it in 2 years, when property prices are well into their recovery. Loans are bad news unless you really HAVE to take one. And I speak form experience.

 

Hope he doesn't mind me saying, but Crouchies lawyer may know of some good deals atm, whether you get the loan or look into mortgages. He knows what he is talking about.

Edited 14 March, 2009 by hamster

[Al de Man]

I guess the reason why it's gone up is that there is a lots less money available for loans, ie credit crunch.

[saint_stevo]

i thought the governement lowering rates was so that banks would lend money and thus boost the economy?

[Al de Man]

i thought the governement lowering rates was so that banks would lend money and thus boost the economy?

 

I thought the intention of lower of rates is to make saving less attractive so people are more like to spend money rather than hoarding it away although I'm no financial expert so could be wrong; the same reason for dropping VAT to 15%.

[Saint In Exile]

Main reason for the high interest rates currently on loans and mortgages is that the financial institutions don't actually WANT to lend to anyone right now... They've had their fingers seriously burnt recently and are very very nervous about lending at all...

 

Last January the Bank Of England base rate was at 5.5% and my mortgage lender gave me a fixed rate of 5.49% for 2 years... They've kindly written to me this month to offer me a new fixed rate as interest rates have dropped so much over the last year, the Bank Of England base rate now being at 0.5%, they are even offering to waive the early redemption penalty and arrangement fees whilst offering a staggeringly great rate of 4.69% fixed for 2 years!!!

 

They believe that if they keep the loan and mortgage rates much higher than base then it will put people off taking credit from them!

[hamster]

Thinking about it Stevo, I am quite jealous of you. Strike while the iron id hot mate.

 

http://www.moneysupermarket.com/mortgages/

[OldNick]

I think it is still wrong to encourage people to borrow at present.

Look back to the early seventies when Harold Wilson had gone cap in hand to the IMF to borrow above our means, and then printed money (it is now call quantative easing) within a year we had rising inflation.

Normally to quell rising inflation the interest rate has to rise. House prices will go up if the unemployment rate doesnt increase but with the amopunt of job cuts around I doubt it will be for a few years.

There will be a levelling off for a period as people with money in the building societies etc look to invest elsewhere to get a return and somay go into property but they will be squeezed as rental returns are going down as there are more properties to rent and so prices are being slashed to get a tenant. Only this week my daughter rented a property in London and rents have dropped nearly 30% in some places.

THis makes the return on an investment poorer and so soon thiose investors will stiop buying and prices will drop again.

As I suggested more than a year ago on here, get rid of any credit card debt at all costs as we are in for a rough time. Even if it means forgoing a holiday or a tv etc.