Loan Offers
Be wary of vague loan offers
Summary: Loan providers give a very useful service, but there are gaps in the covering legislation which may cost you more than you expect.
Advertisements have to avoid misleading claims, so you can believe what you read can't you? The answer to that is 'possibly not'
Cheap Loans News
Attempts to generate sales by playing with figures are well known in many fields. Take for example the notorious word 'from' - used as a price guide i.e. 'from £149.99' should mean that the product advertised is available at that price, whereas in practice it is not uncommon to be told that all the stock at that price has been sold. Strangely enough there is often a 'better quality' version available at an extra £10 or so. Nothing illegal in that, unless you can prove that the lower priced stock never existed.
So when you see advertisements for loans it is essential to step back and take a broad view. Is the advertiser making a definite offer with a firm interest rate, or is it open to variations? A good example is the annual percentage rate quoted in many adverts, the use of which is closely governed by the rules laid down by the Consumer Credit Act (CCA). This requires that where an APR figure is quoted as an average or typical rate, then that rate must be made available to at least 66% of those applying.
This seemingly simple and straight-forward 'offer and acceptance' situation can carry a significant disadvantage for the potential borrower. The initial contact may produce an offer which is not matched to the advertised rate but is presented as an offer which is personal to the applicant. This, without actually saying so, can give rise to hopes of a cheaper rate than that quoted, so further information is requested.
The potential lender, still without making any specific commitment, then gets a credit check on the applicant, and this is the first drawback - the credit check application goes on the customer's record whether or not the loan is taken up. This indicates to any future lender that you have made a search for credit; too many of these will provide an impression of someone who is living on the verge of debt, which will inevitably and adversely affect interest rates quoted against any future application.
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