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

gemspan · 11th February 2007, 19:16

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

11th February 2007, 19:48

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 · 11th February 2007, 20:01

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 · 11th February 2007, 20:02

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 · 11th February 2007, 20:11

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 · 11th February 2007, 20:25

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 · 12th February 2007, 07:43

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

lou7603 · 13th April 2007, 21:20

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 · 14th April 2007, 11:25

Hi All

This thread may help you

Who has had Managed Loans?

ANDENA · 24th October 2007, 19:27

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 · 24th October 2007, 23:41

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 · 21st November 2007, 16:02

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 · 21st November 2007, 17:56

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 · 21st November 2007, 18:16

Quote:

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 · 22nd November 2007, 00:13

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 · 22nd November 2007, 12:38

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 · 22nd November 2007, 12:59

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

gemspan · 22nd November 2007, 14:40

Quote:

Originally Posted by 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

Hi Penfold

This is very interesting reading. I too have a managed loan with the wrong APR on it. Effectively it has 2 APRs one of 16.9% and one of 15.7%. They are trying to say the 15.7 is the simple rate of interest but it clearly states it is the APR. Additionally, they have set out the managed loan in a way so as to confuse me ie the total charge for credit is £25,000 (something!) which I thought was the total I was repaying. This turns out to be the interest only. I am effectively repaying £45,000 for a £20,000 loan. They consolidated a small business loan, overdraft and a small balance on my company credit card. The business loan had PPI on it but the managed loan doesnt. I was paying £250 per month and now they want £320. I couldnt afford the £250 as it was and was looking to have that reduced. I feel as if I am in hock to HSBC for the rest of my life because there is no way I can afford to repay £45,000. I am really depressed about it but I think I may have a way of getting htem to negotiate because of the APR. Also, the overdraft included bank charges. Can I reclaim them too>

Thanks
Gemspan

Penfold92 · 22nd November 2007, 16:30

Hi Gemspan,

Have a read of http://www.consumeractiongroup.co.uk...agreement.html

Also is your main account still with HSBC? Reason I ask is they are buggers and do not let you cancel the DD to that loan so you may need a parachute account if you are going to try to take things further... Read up first on everything and then make a decision with the full knowledge... In the meantime no harm asking for your true signed copy of the agreement under the CCA. See if they come up with the same original you have with the errrors on it. Also you may wish to post a new thread on the general debt forum and the guys there will help you through this now...

Penfold

hsbcfiddled · 24th December 2007, 10:53

Merry Xmas,
keep at em!

MANAGED LOAN- Definition of.

We (A bank) have MANAGED to con you (our loyal customer i.e. MUG) into paying exhorbitant interest on a debt that we have manufactured (in most cases) by adding exhorbitant unlawful charges to your account.
Thus we are able to 'make you an offer that you cannot refuse' (quote from 'Cosa Nostra' manual for collecting monies).
The offer being, we then, lend your own money back to you (that we have taken unlawfully from your account) to pay off your overdraft, that we have manufactured with our unlawful charges.
You promise to make monthly payments to us (A bank), that are massively loaded with interest so that we have you contributing to our enormous profits for the rest of your life, and after if we can.
Because you have made your promise the bank reciprocates your promise by promising that every time you go even a few pence over your overdraft or are late making a payment WE PROMISE to hammer you with even more unlawful charges.
The interest that we take from our MANAGED LOAN system is then lent out to other mugs (writer included) to pay off more manufactured debts (overdrafts etc.) and thus the cycle continues.

hsbcfiddled

CAG Products - We think that these will help you to make your claim or Reclaim your Right These sales also help us to keep helping YOU and ensure this site will remain free to use!

Small Claims Kit--	Small Claims Court Guide New Edition	Consumer Action Group envelope labels	Last Will & Testament Kit	Fight a Motoring Ticket

Alternatively you could purchase a CAG email address here, or maybe you'd prefer our address labels here
UPDATE: Consumer Forums ConsumerWiki is now LIVE - click here: ConsumerWiki