i have a loan as described above

it has a ceiling of 8,500 and a balance of 2,900

the idea behind a flexible loan is that withdrawals and

payments are flexible.

although the rate is variable

in april 2006 the apr was 9.5%

there has been two increases since then to

 

14.9% and now 19.9% which i consider akin

to loan sharking

i know that abbey/cahoot no longer offer this type of loan

however i feel greatly agrieved that as a borrower

can anyone advise me on steps or action?

thanks
 

 

Check first for any early repayment penalty, and try for a 0% interest credit card with the longest term you can get, that you can transfer the balance of the outstanding loan on to, then you can end your agreement with cahoot. Try to pay off as much of the balance on the credit card before the 0% interest free period expires.

Hi patfla,

 Assuming you have no adverse credit at the moment there are plenty of loan companies who I am sure can do better than your current APR on a fixed rate, however before I look at any firm providers can I ask what kind of budget you have in terms of a monthly repayment, and can I also ask what is the maximum time you would want to take a loan over to clear the balance of the current one?

In terms of moving your balance to a credit card I would only suggest this option if you know you can cover the balance at the end of the promotional period, if you don’t then you will be back up at a high rate very quickly.

 A loan of £3000 at a APR of 7.7%, fixed, would only incur around £360 in interest over 3 years, you would have to decide if saving that some is worth the gamble of moving funds around on cards when there is no guarantee of paying if off at the end.

 

---

Many Thanks,

Gareth Sharp

moneysupermarket.com

thank you for your response

i would still like to question the ethics of this company

in doing this 

i do have the ability to repay the loan by other means

my query is regarding the ethics of cahoot/abbey

in 12 months three interest rate rises

9.15

11.9

14.9

19.9,this i find difficult to accept

thanks

patfla 

 

Hi-

With Variable rates, it's hard to comment on the ethics of raising them.

BoE base rates are on the increase but not to a level of 10% like the rate you have been given!

In terms of a complaint you would have to approach the lender first and find out the justification for the rise. At the moment your options are limited in terms of additional action as your loan agreements will state that the rates can move.

What I would say is that the "buzz" phrase in the industy and at the FSA at present is about "treating customers fairly", if such hikes are not "fair" or justified you could try writing to them and see what happens.

---

Many Thanks,

Gareth Sharp

moneysupermarket.com

thanks,

i will pursue this option

 

patfla:

i have a loan as described above

it has a ceiling of 8,500 and a balance of 2,900

the idea behind a flexible loan is that withdrawals and

payments are flexible.

although the rate is variable

in april 2006 the apr was 9.5%

there has been two increases since then to

 

14.9% and now 19.9% which i consider akin

to loan sharking

i know that abbey/cahoot no longer offer this type of loan

however i feel greatly agrieved that as a borrower

can anyone advise me on steps or action?

thanks
 

 

I too had a flexible loan original loan interest rate was 6.5% then it rose to 8.5% then 12.5% then at 14.5% i decided to pay it up and it caused me great financial problems, i fully paid this up but kept it open in case i needed it for a rainy day, imagine the shock i got when its just gone up to 19.9% however im not surprised there part of the abbey national, they closed my business account on the basis it was an unethical business, when i explained my mortgage was with you they said the same rules do not apply, we are happy to keep you as a mortgage customer, AVOID THIS BANK im now after banking with barclays moved all my banking to the bank of scotland, its cheaper, better service, personal uk customer call centers, old fashioned ways of doing things, and easy to get to now there part of the halifax groups ,,,,,,CAHOOT it certainly isnt!

im a cahoot customer with a 6k balance and too have been stung with the rise in APR to 19.9% (originally 8.6!) as soon as i received the email informing me of the rise i started to look on here for a fixed rate loan instead. Looked first to just replace the 6k and tried Asda for a 4 year period n was refused without reason. 

I also have a fixed rate loan with TSB for £4,800 (24 months left of a 60 month loan, wont ever go near them again) and the combined monthy payment for the two is almost £400, so after checking rates for a 10k loan over 4 years on here, i saw my monthly payment could be reduced by £130 if i took out a new replacement loan, i.e. my new monthly payment would only be £250 with an APR of 7.9% (without loan protection). A huge saving over 4 years.

Since Asda refused me i tried Abbey, thinking they would be the most sympathetic by being Cahoots parent company. Afterall, it seems they want to get rid of Cahoots loan facilities. Applied for a 10k consolidation loan, got through everything ok, i live with parents, no kids, no mortgage, no car, am full time permanantly employed, never defaulted, no CCJs, have an "excellent" credit rating. They agreed a 10k loan in principal, over 4 years, at an interest of 7.9%, but turned me down cos "they couldnt guarantee i would use the money to pay off the two existing loans".

I emailed cahoot explaining that i was worried i may not afford the payments if the interest rate on the loan kept rising, and they provided me with cahoots debt management phone number, where a snooty woman promptly told me they did not do fixed rate loans, try Abbey! After explaining the situation to her, she offered me a debt repayment plan. I could lower my payment to £53 per month over the next ten years, pay no interest etc, and it would be marked on my credit history, but they "couldnt simply freeze the current interest without the debt plan"  She seemed surprised when i declined the offer!

Im not looking to write off the loans, i took the debts fully intending to repay them, with added interest, i simply want to re-structure them so i am not paying an extortionate amount of interest. If im restructuring one loan, i may as well do both so i only have the one payment, right? I dont care if a loan company pays off the debts directly and i then repay them. However, as no one is willing to secure a loan with me, i feel i am going to be forced into seeking an IVA! With talk of interest rates going up again shortly, cahoot will use this as an excuse to increase the flexi loan rate yet again, which will take it to a point that i can no longer afford to pay it, n if i default on one loan and ruin my credit rating, i might as well do it on both of them!

I am fully capable of maintaining the £400 a month i currently pay, (over £400 would be pushing things)  i just feel i am being screwed by cahoot and dont like them getting any more of my money than necessary. But what realistic options are there for people such as myself when other loan companies arent interested in u? I can only see that cahoots greed is going to force me into an unnecessary and totally unpleasant choice.

 

it sems like a lot of people myself included have been hit by this hike.

i am in the process of sendig a letter to the FSA regulatory body to

look at cahoot/abbey.

maybe if others come forward and contact the FSA cahoot/abbey may

become accountable for their actions.

As a reponsible lender their business methods are quite irresponsible

dear gareth sharp,

having noticed a lot of replies from other people

it would seem that cahoot/abbey have introduced a blanket

19.9%apr

as the product is no longer available on their website

it is my opinion that they are introducing this tactic to

railroad people into either taking out unsecured loans

with abbey or alternative means so that they can close up

loose ends and accounts of this product

any ideas?

I Think you right i also notice and suspect that other lenders offering a low rate for advertising , when really when you apply, like i did , to barclays i had recently paid of a 30k business loan at 6.2% i applied for the latest offer at 5.9% they declined my application but suggested on the phone that i take out a credit card with a £20k limit,
Also a recent trip to pay in £370 at the halifax branch i was asked "where did you get this money from" I was shocked, and annoyed as a small branch everyone could hear,
We live in times where if someone is friendly in a bank its to sell you something, to qualify you for new business, a loan, a card, insurance, best not to speak to people anymore,
Regarding Cahoot i think your right they dont want these flexible loans currently issued, hence there not for sale, and the hike it to get us all to move, well its working,
Im writing to the bodies that might take interest , and also watchdog they love bank stories,
Im also have having to sell allot of things i dont need to make some money to make up for my cash shortage caused by paying mine up, things i have around and wont miss, maybe some of you have also items to liquidate to make some money to pay against your loans, Maybe we should get out of this loan mentality and just buy what we can afford to pay for outright,
I dont think i will ever borrow again and go back to what i cant afford i wont buy, you just cant trust any of them

johnnie

Yes, it does seem that cahoot have purposely introduced this high rate to get rid of all existing customers, and will continue to do so until that side of the business can be wound up. Unfortunately, i cannot see anything in their terms and conditions that states they cant do this, whether it seems fair to us or not, and im not sure that the FSA can do anything about it just on the grounds of fairness. Afterall, it doesnt state in the terms and conditions that they will be fair! But good luck to anyone who tries.

As far as selling everything to pay off the loan, ive been doing that for the last three years just to get this far! Having done so, this now feels like a slap in the face for trying. I couldve increased the loan to the maximum i could get, n then file for an IVA so they would lose the money, instead i want to pay it all off.

Does anyone have any ideas about loan companies who would be willing to take it over? that would not charge such an extortionate rate?

IM NOT SURE BUT SOMEONE MIGHT BE ABLE TO TELL ME IF I THINK ITS THE CASE,
if one was to try to get a loan at the lowest possible rate, it might be refused not because our credit is bad, but the fact they only approve 40% to keep the lending at the lowest rates in check, thus allowing them then to some people offering them a higher rate loan eg 40% at 6.9 and the other 60% at a higher rate depending on what they wanted the loan eg, car finance always seems higher than say for home improvement , for of say 8.5 or higher the fact that someone was turned down might be that they perhaps reached there commitment level for that 6.9 % limit on that day or week,
in your situation it might not be advisable for you to apply for the very cheapest apr, but go for approval on a mid range one,
please if any one knows if this is how it works please let us know more,?

johnnie

i have been in contact with consumer advice re this issue

as g.sharp has stated ,treating the customer fairly,is the buzz

phrase.

what you can do is contact the FOS,not the FSA wo look at

issues like this

if you look at there website it will advise you on the course of

action to take

a. contact the lender in written form and show your concerns

etc.

it then continues on advising how to pursue this issue

it really only costs the price of a stamp and if more than one

individual sends correspondence regarding this flexible loan

then perhaps they will act on cahoots shambolic practice

 

p.s. although i e mailed my concerns to cahoot and

an automated reply  stating that they would answer

my query within 2 working days they have now

stated that they did not recieve my e mail..

time to get to work on this company and its

business practise