Personal Loan News Articles

People who have taken out loans and credit agreements have been warned to steer clear of companies offering to help claim back payment protection insurance premiums.

The companies have been sending out promotional text messages claiming their records show the person is entitled to a particular amount, usually £3,750. It appears the companies do not have any such records and are simply sending them out to every number they can get hold of, working on the basis that it doesn't matter if most of the messages are wasted as long as a few customers get picked up.

Once people reply to the message, the company will offer to help make a PPI claim, in return for a fee which can reach 25% of the amount the person eventually wins back from a lender.

Consumer Read Full Story

People experiencing problems repaying loans and credit card bills need to be particularly wary of a scam spreading by text message.

An unsolicited text message doing the rounds reads "Due to a new legislation, those struggling with debt can now apply to have it written off. For more information text the word 'INFO' or to opt-out text stop." Other variants refer to "debt settlement order" or "debt relief order."

It appears the scam has nothing to do with the subject of the text itself. It's simply an attempt to trick vulnerable people into replying and unintentionally "authorizing" the company to send further messages that entail charges for the recipient. Furthermore, there is no new legislation and no such thing as Read Full Story

British borrowers now have twice as long to change their minds after taking out a loan or credit facility. The protection now covers all forms of credit agreement.

Previously borrowers could only change their minds when they had taken out a credit deal through the post or online, which qualified them for the standard seven-day cooling off period for such distance selling. Buying in person came with no such option.

Under the European Consumer Credit Directive that is now in force in Britain, there's now 14 day period for any form of credit agreement, which includes loans, Read Full Story

Debt support groups are reporting a widespread problem with people being lumbered with the debts of ex-partners.

According to the Consumer Credit Counselling Service, many of the requests for help it gets come from people with joint financial accounts who have either separated or divorced.

It told the Daily Mail that many such people failed to realise that not only do such financial ties remain in place even after a split, but that they operate on a "joint and several liability" basis, meaning either partner can be held legally responsible for the full debt.

The group warned that people should be very wary about taking out joint accounts or loans in the first place. It also noted that immediately Read Full Story

Parliament has stopped short of a motion demanding a limit the levels of interest lenders can charge. But MPs did back a call for regulators to "consider" a cap in some circumstances.

The original motion, brought by Labour's Stella Creasy, would have urged the Government to immediately bring in caps on "areas of the market in unsecured lending which are non price-competitive" -- in other words, where so-called "loan sharks" take advantage of people who can't get credit from mainstream sources.

Although the motion wouldn't have changed the law, it would have put strong pressure on the Government to act.

MPs did eventually vote in favour of the motion, but only after backing an amendment by Conservative Robin Walker Read Full Story

As of 1 February, millions of people could find themselves applying for loans only to find they get offered an unexpectedly high interest.

That's the date that a European directive on credit advertising takes effect in the UK. It means that existing laws that say advertised rates should be offered to at least 66% of people who apply will be replaced by a new figure of 51%.

While it may seem odd that a European law could weaken consumer protection, the new rules are being strictly imposed, the argument being that it makes a level playing field for insurers across the continent.

Borrowers have been advised that the move makes it more important to check credit records are accurate, and take steps to improve credit ratings. This should decrease the chance of Read Full Story

Homeless charity Shelter was warned that the number of people using a credit card to pay their mortgage is on the rise. That's prompted warnings for those in such trouble to avoid unscrupulous and unlicensed lenders.

According to the Shelter report, 6% of the homeowners it surveyed said they had used a card to make mortgage payments. If that figure is accurate, it's equivalent to 2.6 million people across the country. The proportion is up from 4% when the charity carried out the same survey in November.

The group said that using cards was the worst possible method to cover mortgage shortfalls (of legal methods at least), noting that credit cards are mainly designed for short-term Read Full Story

The Consumers' Association has warned that mistakes on credit records could be more widespread than previously thought. This could mean potential borrowers being unfairly refused credit or offered higher rates.

According to the CA's magazine Which?, one in eight of its members who have checked their records have discovered a mistake. It is worth noting that this may be a little higher than the overall proportion as some of those people will have checked records specifically because they suspect an error, rather than merely making a routine check.

The association said credit agencies gave two main mistakes for errors: incorrect information passed on by former lenders, and reports still showing now outdated financial associations. These are where the financial Read Full Story

London Mayor Boris Johnson has criticized the fees charged by a loan company that's sponsoring New Year's Eve transport.

Wonga.com, a short-term or payday loan company, is covering the costs of bus and underground travel in London between 11.45pm and 4.30am to allow revelers to make it home on the big night. Given the state of the economy and concerns over debt, that's led to harsh criticism from people pointing out that Wonga's interest charges are the equivalent of 2,689% a year.

Interviewed on LBC radio, Johnson defended the sponsorship deal and stressed that the company was licensed to lend money and does not Read Full Story

The Consumers' Association has warned that major banks are often not the cheapest sources for loans. Instead it suggests supermarkets and lesser obvious banks could be a better bet.

According to the group, while Sainsbury's and Tesco both charge 8.7% APR on a £5,000 loan over three years, some high street banks charge more than twice as much. Even the lowest bank rates on offer elsewhere are significantly higher: the 12.9% that appears to be standard for at least five major lenders. That would cost almost £350 extra in interest charges.

There are two banks offering rates similar to the supermarkets: Santander and Read Full Story