Lenders have been at great pains to point out to the FSA and the Competition Commission that the granting of an unsecured loan is no longer dependent on whether the customer takes Payment Protection Insurance or not.
Yet my own experience shows that lenders haven’t given up on the hard sell yet! I am in the unenviable position of wanting to convert part of my garage into a study/playroom, but not having the readies to pay for it. So like all sensible people I had to take out a personal loan to fund this. I’m good for the cash, so I knew that getting a cheap loan wouldn’t be a problem.
On Sunday morning I searched online for the best deal, from a major bank, then applied on the Web. Fantastic, job done, sorted. Roll on the builders.
However a couple of hours later I got a text message asking me to call the bank in question regarding my application, so I gave them a ring (on an 0845 number too, so not a free call!). (more…)
Bookmark this article:
These icons link to social bookmarking sites where readers can share and discover new web pages.
The general concensus is that the Monetary Policy Committee won’t change the Bank of England Repo rate (base rate) in their meeting taking place this week. Expectations are that the rate is currently on a downward path although inflationary pressures may temper the MPC’s willingness to reduce further and faster.
There are clear economic worries too and suggestions that the US economy is in recession may lead to similar revelations over here in due course.
From a financial point of view the fallout from the US sub-prime credit crisis has meant that banks are generally unwilling to lend to each other and are finding it both more difficult and more expensive to raise wholesale funds.
This gives us an unusual situation.
If you’re a saver the best deposit rates are significantly out of kilter with the base rate. Ordinarily you’d expect to be doing well if you could find a savings rate that was equal to - or just below - the bank base rate. Now, however, you can beat the base rate by over 1% with certain cash ISAs or savings accounts. This is happening for two distinct reasons: firstly general eagerness to raise retail funds and secondly new entrants (typically foreign bank subsidiaries) who have to offer best buy status accounts to obtain sufficient customers through the resultant publicity.
(more…)
Bookmark this article:
These icons link to social bookmarking sites where readers can share and discover new web pages.
With so much press comment around about cancelling Payment Protection Insurance (PPI) we are often asked where customers who do want cover can go online to purchase standalone PPI or Income Protection Insurance (IPI).
These policies are used to protect the customer in case they are unable to make loan or mortgage repayments following unemployment or sickness.
Anyone buying PPI cover must be sure they read all the information and questions asked by the insurer to make sure they are eligible to buy the policy, and make sure they understand any exclusions which might apply to claims (such as restrictions on backache or mental illness claims, or for pre-existing medical conditions).
The following companies all sell cover on a stand-alone basis:
Standalone Mortgage Payment Protection
Provider
|
Web Address
|
Phone
|
Cost *
|
Ant Insurance
|
|
020 8972 557
|
£2.36
|
British Insurance
|
|
08450 175 178
|
£3.25
|
Churchill
|
|
0800 404 770
|
£4.00
|
Post Office Ltd
|
|
0800 633 967
|
£4.50
|
Web Money
|
|
0845 155 1931
|
£3.50
|
Standalone Income Protection/Payment Protection
Provider
|
Web Address
|
Phone
|
Cost *
|
Ant Insurance
|
|
020 8972 9557
|
£2.50
|
iprotect
|
|
01962 877 818
|
£2.64
|
British Insurance
|
|
08450 175 178
|
£4.05
|
Hitachi Capital
|
|
0870 850 8116
|
£4.25
|
Paymentcare Ltd
|
|
0870 428 4088
|
£4.40
|
Pinnacle Insurance
|
|
08000 350 292
|
£2.69
|
Web Money
|
|
0845 155 1930
|
£4.44
|
|
* Cost is cost per £100 of cover for a 35 year old man, with 12 months benefit. Note that premiums vary markedly and this is in part because differing policies offer different features and benefits.
Bookmark this article:
These icons link to social bookmarking sites where readers can share and discover new web pages.
Following The Monetary Policy Committee’s decision to reduce the Bank of England Base rate by 0.25% to 5.25%, Defaqto’s Principal Consultant - Banking, David Black comments:”This 0.25% cut by the Monetary Policy Committee was widely anticipated and comes as no surprise. I will watch with interest to see whether the full cut is passed on to both savers and borrowers but I suspect that some providers may use the opportunity to widen their margins at customers’ expense.
“Prior to this cut the average Standard Variable Rate is currently 7.55%. Last time the bank base rate was at 5.25% (between 11th January and 9th May 2007) the average Standard Variable Rate was 7.05%.”
Ends
For further information contact:
Defaqto Limited
David Black, Chris Johnston or Luci Mylward
01844 295 454
Bookmark this article:
These icons link to social bookmarking sites where readers can share and discover new web pages.
A review of the personal loans market by Defaqto reveals that borrowers could end up paying less in repayments by taking out slightly larger loans with the same lender.
This anomaly arises due to the way most lenders structure their rates, which differ according to the ‘tier’ size the loan falls into. Generally, a higher interest rate is charged on the lowest tiers and rates then decrease as the amount borrowed increases, often then plateauing and remaining unchanged for the larger amounts.
The top end of the first tier for most lenders falls between £1,000 and £5,000, while others have two tiers in this range, and differences between the rates charged in one tier and those in the next tier up can be quite significant.
(more…)
Bookmark this article:
These icons link to social bookmarking sites where readers can share and discover new web pages.
