What's the difference between an HSBC managed loan and a normal loan?

[gemspan]

HI there

Can anyone tell me the difference between a managed loan and a normal loan? When I hit financial probs HSBC put me on a managed loan with payments of £321 per month which are crippling me.

Any answers would be appreciated.

Thanks
Gemspan

A managed loan I think is one specifically on charges and likelihood is that it is about 3% higher than a normal loan. I hope someone with a bit more knowledge of HSBC can either confirm or correct me.

[acer]

Good evening Gemspan

From my own experiences the managed loan is one that is generally imposed by the bank as a means to 'help' people sort out problems such as overdrawn accounts etc. It normally has a higher interest rate than an ordinary bank loan and has other strings attached such as no overdraft facility or access to other forms of credit. You may find, as I did, that even after the loan has been paid in full, with a perfect payment record that further credit is refused.

Over the past ten years or so I have had three managed loans imposed upon me and am at present resisting overtures from hsbc to take another one...I might add that all these loans were a direct result of bank charges and if I knew then what I know now, as a result of this site, I woul
d'nt have signed the paperwork.

Not only do they screw you with the charges...they then sell you the money to pay
them back...unbelievable is'nt it......But now the worm is turning.

[nettyg]

i always saw managed loans as 'last resort loans' where the bank make you feel like you're not going to get help anywhere else so pay up even though the interest rate is higher than anything else!!

they're usually the ones that get everybody into serious trouble if you don't pay an installment - they seem to spiral out of control very quickly!!

[gemspan]

The amount that I'm paying is so much more than my original loan £321 as opposed to £250 (and that included ppi!). Is it worthwhile complaining to HSBC about this because I dont think they have taken my best interests into account. If they really want to help, why do they charge you over the top interest? It just doesnt make sense.

Annie

[nettyg]

but now we know that the banks don't operate in 'your best interests' but seem to zoom in on your vulnerability...... just go for the claim - get it back

[cybergypsy]

The interest rate when they offered me one a week or so ago was 10.95%.

[lou7603]

Hi All,

I posted this on another HSBC thread about managed loans. Anyone had any better luck than me??

was forced to take out my loan to refinance a personal loan from HSBC that was from my husbands Uni overdraft and student loans etc plus a credit card of my own about 3 years ago- I was paying 7.3% on that loan and am now paying (supposedly) 12%. These loans are a nightmare as they will not allow you under any circumstance to pay a lower amount- for example I was off work for 4 weeks with laryngitis and wasn't paid for it- called HSBC to see if I could pay a lower amount for that month as I was the best part of £1200 down on my wages. They refused point blank- took their £216.00 and then returned other direct debits due to insufficient funds!!!!!!!!!!!!!!!!! The bank wins every time. I'm glad that people are fighting back. I can't even work out the percentage of interest that I am paying as I don't hve a clue how they calculate it. All I know is that in 18 months or so I have supposedly only paid off £500 when in reality I have paid approximately £3888???????????????????? ???????? They are no better than loan sharks that come to your door. I wouldn't mind but I'm not exactly high risk- we own our own home, both work full time and bring in good money- yet we are treated like untrustworthy idiots. I am absolutely going to fight them over this as I am sick of going out to work to pay people like them!! RRRAAAHHHHHHH!


Well, couldn't go to the branch this morning as the kids are still off school ( didn't think it would be wise for my 3 and 5 year olds to see mummy going purple in the face and screaming at the nice bank man!) so I called the credit department. I have had a splitting headache ever since. The extremely (!) nice man on the end of the phone told me that I had signed for the loan therefore I signed the terms and conditions. I told him that I had signed up for 12.25% interest and expected to pay 12.25% not the almost 60% that I am currently paying per month. He assured ( ) me that I am not paying 60% and that the more of the loan that I pay off the lower the interest payment will be. However, if I pay the loan off early there will be no rebate of the interest that I have paid . So HSBC are expecting me to continue paying £216 for the next 8.5 yearson this loan. This means that I will actually be paying them £25920.00 for a £15k loan. Hmmm, let me just ponder on that one for a minute..........
Nope I don't think so........
I asked how HSBC thought they were any better that loan sharks to which I got the same answer " you signed the paperwork"
I may have signed the paperwork, but it was under duress as HSBC told me it was that or bankruptcy. They even gave me the business card of an insolvancy practitioner!!! When I took this loan out to get rid of the joint one I was made to put it in my name only. I was also unemployed.I lost my business in the October ( hsbc knew this as I had a business account with them) took this loan in the Jan and didn't start work until the March. They never allow you to lower the payment if you get into difficulty and then charge you if there is not then enough money to cover your other bills in your account. I have now transfered the money from my remortgage from my HSBC account and I will not be clearing this managed loan as yet, as I have put a complaint in with the ombudsman about the way HSBC put these loans across. They have told me that its a bit like a mortgage- uh, no- it's a personal loan that is linked to your bank account that allows the bank carte blanche over you and also allows them to treat you like a 14 year old only allowing you to have a solo (rraahhhh) card and then to speak to you as if you are an idiot. NO MORE. I will go to court over this if I have to...............

[rdm2006]

Hi All

This thread may help you

Who has had Managed Loans?

[ANDENA]

i have a managed loan with hsbc i cant have overdraft also found out i am only paying 37 pound of loan the rest is interest altogether end of loan i have paid£23,000 for £11,000 loan ithink we should all pull together to get this sorted.

[Castlebest]

Hiya Andena, although logically charging someone with a financial problem more to borrow money than someone who is better off may be morally reprehensible its not illegal. You relay do have to sort out where you are and what you have signed up to as an individual yourself.

There are plenty of people about who have been convinced by the banks that these terrible managed loans were a good idea and it will probably be better if you start your own thread, heres the button.



and heres a more up to date thread for you to look at

Who has had Managed Loans?

all the best

pete

[cfcboy]

Hi, quick bit of advice if possible?

me and my girlfreind both have managed loans. Im paying £150 per month in which HSBC then add £90 back onto the loan! I started in april 06 owing £9.4k, nealry 20 months later i still owe them a whopping £8.4k !!

Im thinking of getting a secured loan just to get this monkey of my back. I have slightly poor credit rating so the apr is approx 11.3% using a company called nemo. Its basically 12.9% percent but you get get a quater back when youve paid it all off.

Should i go ahead and get a secured loan to get these managed loans clear. Im not sure im doing the correct thing, any advice woudl be greatly appreciated

[Castlebest]

you need to look at the terms and conditions of any loan very very closely these people are lending you money because you are a high risk and they can make more back that way, they are not doing you any favors. Off the top of my head check particularly for...

• are their any penalty clauses for early redemption? may seem silly now but if you find a cheaper loan or decide to wrap it up in a house mortgage in the future it could cost you.
• what is the basis of the interest you will be paying? is it just fixed by the company at what they feel like or is it fixed at X% over the Bank of England rate for example?
• How much will you pay in total over the whole period of the loan? is it really cheaper or have they just extended the period of the loan so your great grandchildren will still be paying?

Read anything before you sign it and think what effect the terms and conditions will have on you... not just now but in five or 10 years time too.

Be very careful

pete

[ANDENA]

Originally Posted by cfcboy

Hi, quick bit of advice if possible?

me and my girlfreind both have managed loans. Im paying £150 per month in which HSBC then add £90 back onto the loan! I started in april 06 owing £9.4k, nealry 20 months later i still owe them a whopping £8.4k !!

Im thinking of getting a secured loan just to get this monkey of my back. I have slightly poor credit rating so the apr is approx 11.3% using a company called nemo. Its basically 12.9% percent but you get get a quater back when youve paid it all off.

Should i go ahead and get a secured loan to get these managed loans clear. Im not sure im doing the correct thing, any advice woudl be greatly appreciated

andena is your hsbc managed loan secured now as they did not secure mine read my threads

[goatlips]

I have a loan with hsbc,so how do I know if its a managed loan?? Do I have to phone up and ask??

[Penfold92]

Surely they are still loan agreements under the Consumer Credit Act and so have to sit under that legislation. It may be worth reading up about the CCA requests and seeing what your bank really has on you...

Also I know from my own personal case that my managed loan had the wrong APR on it...I could have claimed it was unenforceable, unfortunately I discovered this site Way way too late...LOL

Penfold

[Castlebest]

anyone who lends money to an individual in the UK is bound by the Consumer Credit Act no matter how the loan is structured or what name they give it.

Managed loans (from HSBC anyway) tend to be given to people who get into financial difficulty, they work out how much you can afford to pay per month then slap a ridiculous interest rate on it so you are bound to them until your grandchildren are drawing a pension. yes it means you can afford any debt that has built up but it is no way to get debt free.

Edit; if you need any proof of this just look at the figures quoted by Gemspan below :o

pete