# Loans



## shane_ctr (Dec 17, 2006)

Hi guys,

Bit of a rant

I am an HSBC Advance Customer i have a current account in joint name with my wife the account has a £1000 overdraft but we have never once used it. We also have a joint savings account with a couple of grand in which we keep for a rainy day, I also have an ISA account. I have a Virgin Credit card that has 5k on it that is on 0% that i pay direct debt every month. 

I currently have a company car that is due to go back at the end of the month so my company have offered me a choice of a company car or buy a car and we will give you a monthly car allowance of £400 and charge the company for milage. I have opted for this and have found a car and need to borrow some money and applied for a £13000 loan over 5 year at 3.3% with HSBC i have been accepted but at 6.6% I've spoken with them on the phone and told this is the best i will be offered but i do not understand we own are own house in which we own a large chunk, Never later on payments, etc etc we can easily afford the repayments. I am going to arrange for an appointment with the local branch to see if anything can be done as I've had loans in the past and always had the advertised rate and always settled the loans early in full.

Any advice do you think i stand a chance of getting the % rate down?:thumb:


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## MDC250 (Jan 4, 2014)

Have you checked your credit rating with Experian or similar?

An advertised rate of interest is not a given.


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## shane_ctr (Dec 17, 2006)

MDC250 said:


> Have you checked your credit rating with Experian or similar?
> 
> An advertised rate of interest is not a given.


yea i checked approximately a month ago and was 999.

I have had advertised rates in the past so can't understand why i can't get it again.


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## MDC250 (Jan 4, 2014)

In that case and I'm guessing mate, maybe your rating is too good and they don't think they'll make enough money out of you?! 

Borrowing a little bit more and/or over a longer term could make a difference maybe?


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## shane_ctr (Dec 17, 2006)

MDC250 said:


> In that case and I'm guessing mate, maybe your rating is too good and they don't think they'll make enough money out of you?!
> 
> Borrowing a little bit more and/or over a longer term could make a difference maybe?


Maybe that is the case i will speak with the bank on Wednesday and see what is said. Its just so frustrating when you know you can afford it. You see the rate and the monthly repayment and then you find its gonna be another £20 a month which again i can afford but i have seen the lower rate.:thumb:


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## ffrs1444 (Jun 7, 2008)

Some cars new do 0%


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## chrissymk3 (Jul 6, 2015)

I had exactly the same issue as you with HSBC mate but sure my offer was 6.7%, ended up not taking the loan out and got the car on a lower finance rate through the dealership


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## Darlofan (Nov 24, 2010)

Credit ratings are worth jack sh!t. A bank is a business and they're there to make as much money from you as possible. Advertised rates are rarely given and just used to get people hooked in. Once someone's been accepted they're unlikely to pull out and banks know this. Banks look at you as to how much they can make from you and what they can sell you in the future. If you have credit cards but pay them off monthly so pay no interest they're not too interested but if you miss the odd payment and have a balance left they'll be more interested.

Problem with credit checks is it leaves a footprint on your file so if you turn down that loan and apply for more it starts to look like you're desperate for money. The system needs to change.


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## Andyg_TSi (Sep 6, 2013)

Are you mad?

Choose the company car option. It'll work out cheaper overall for you.

So instead of you just paying the tax on the benefit out of your gross salary for a fully maintained car, taxed, serviced etc:

Your going to take a car allowance, upon which you pay tax & NI, which leaves you with a net amount to buy a car.

Out of that net pay you buy the car, on a loan which you pay interest, take the depreciation hit, pay for servicing, VED and upkeep
Youll be left with a worthless car once youve paid the loan off if youve done mega mileage.

If i had the choice, i know what option id take. The only reason why employers offer a car allowance is so they can avoid the class 1A NIC and pass the costs of the vehicle onto the employee.

Also, if (god forbid) but if someone with a company car sadly lost their job, theyd have to hand the company car back.

Someone whos took the car allowance & has bought their own car to use instead will still be responsible for the car payments on the loan if they lose their job.

Take the company car option & save yourself money/hassle.


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## sshooie (May 15, 2007)

^^ Good advice above, but I've opted out for the past 8 or so years, I could never see me in a company car tbf. 

I buy a few months old and sell @ 3 years usually when the warranty is up. I reckon to lose c £3k pa in depreciation and also that was I drive what I want.


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## shane_ctr (Dec 17, 2006)

Andyg_TSi said:


> Are you mad?
> 
> Choose the company car option. It'll work out cheaper overall for you.
> 
> ...


I don't see why I'm mad as in the long run i will make money and have the car i really want.

£400 month allowance, no company car tax to pay and i can claim for my milage which i will make money on. The loan I'm after is only £233 so will be making more money every month i only do 12-15k miles a year.


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## should_do_more (Apr 30, 2008)

You may be cheaper taking more money out and lying it back fast. HSBC usually give a better rate for a higher amount over a longer term. So say you borrow 20k, you spend 13 on your car then pay the 7 back. You have to be careful on any penalty charges bit this may be cheaper anyway over the life of the loan.

Also be careful with dealers offering flat rate to APR. Flat rate is a lot more in APR terms


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## Steven286 (Aug 18, 2013)

Does it have to be HSBC previous experience with them was they were slightly more expensive Try tesco they offer good rates and you can do it online with indication of the interest rate you will get, with your credit score I would imagine you will get a good rate

Another application will affect your rating but I think you can take the hit


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## justina3 (Jan 11, 2008)

I would tell hsbc to jump and go to one of the online banks first direct almost cut the apr in half over what RBS where trying to sell me


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## MDC250 (Jan 4, 2014)

justina3 said:


> I would tell hsbc to jump and go to one of the online banks first direct almost cut the apr in half over what RBS where trying to sell me


OP is an Advance customer with HSBC, suspect the best rate with FD will be similar if not the same as the Advance headline rate with HSBC, with both banks being in the same group?

Can't remember which comparator site it's on but seem to remember one giving stats on what % of customers get offered advertised rates. I've gone by that previously and its served me well.


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## Andyg_TSi (Sep 6, 2013)

shane_ctr said:


> I don't see why I'm mad as in the long run i will make money and have the car i really want.
> 
> £400 month allowance, no company car tax to pay and i can claim for my milage which i will make money on. The loan I'm after is only £233 so will be making more money every month i only do 12-15k miles a year.


Thats £400 GROSS, you wont see £400, itll be £400 less tax/NIC. Assuming you're a basic rate taxpayer, thats approx 32% deduction, so £400 becomes £312 net.

The mileage allowance is a 'catch all' allowance. You wont actually 'see' 40p per mile, itll be 40p x 20% (as tax releif) assuming, again you're a 20% taxpayer.

Think of it this was, lets assume, your a 20% taxpayer.

You get a company car, with a list value of £25k. But the Co2 emmisions put it in the 20% BIK bracket.

So, the amount of benefit upon which you pay tax on is £25, 000 x 20% = £5000

The actual cost to you is £5000 x 20% = £1000 per annum in tax, which is £83.33 per month. Account for the NIC & your looking at £100 per month.

So thats £100 a month for a fully maintained car on your drive that you have available for private use, in the same way you would owning a car privately.

On the other hand, your getting approx £310 per month, but your paying out £233 a month for a loan, W for insurance (inc business use), X for VED, Y for servicing, Z for tyres, suffering A in depreciation (on basis of doing 15K miles per year)

So on the one hand, its cost £100 in tax NIC out of your gross pay

On the other, its already costing £233 for the loan out of your net pay.

Just saying.....but you take the choice


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## Clancy (Jul 21, 2013)

Agree completely with what Andy just said, the car allowance way always sounds good in first principles but doesn't work out better. Every one I know that went down that route regretted it


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## DrEskimo (Jan 7, 2016)

Andyg_TSi said:


> Thats £400 GROSS, you wont see £400, itll be £400 less tax/NIC. Assuming you're a basic rate taxpayer, thats approx 32% deduction, so £400 becomes £312 net.
> 
> The mileage allowance is a 'catch all' allowance. You wont actually 'see' 40p per mile, itll be 40p x 20% (as tax releif) assuming, again you're a 20% taxpayer.
> 
> ...


I had the same discussion with my other half when she was offered a company car or and allowance. I agree with you that a company car is much better financially, but the problem is that it's alright if you want to drive a diesel...if you don't your options are pretty limited. Not to mention the selection was rather....uninspiring...!


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## DLGWRX02 (Apr 6, 2010)

as with what steven286 said.


It may seem like a daft question but have you tried doing loan comparisons? Just because you bank with hsbc doesn't mean they're the only ones you can look to for help.


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## Guest (Jun 26, 2016)

Andyg_TSi said:


> The mileage allowance is a 'catch all' allowance. You wont actually 'see' 40p per mile, itll be 40p x 20% (as tax releif) assuming, again you're a 20% taxpayer.


Is this right? I'm sure if you are being taxed on your mileage allowance, you can claim it back when doing your tax return. 
It is mileage limited however. 45p/mile for the first 10K, 25p/mile there after. You will be taxed on anything given to you above those limits. You can also claim tax relief of any payments received below those limits.

https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax


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## Andyg_TSi (Sep 6, 2013)

BareFacedGeek said:


> Is this right? I'm sure if you are being taxed on your mileage allowance, you can claim it back when doing your tax return.
> It is mileage limited however. 45p/mile for the first 10K, 25p/mile there after. You will be taxed on anything given to you above those limits. You can also claim tax relief of any payments received below those limits.
> 
> https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax


Yes it is right.

You're only taxed on it if the mileage allowance EXCEEDS the permitted limits.

If you using you own vehicle for business use its 45p per mile for 1st 10K miles & 25p per mile for any excess over 10K miles.

Its a calculation for tax releif.

If your doing 'say' 12K miles per year you would work it out thus:

10,000 x 45p = £4,500
2, 000 x 25p = £500

Total amount upon which tax releif is due = £5000

£5000 x (your marginal rate - we'll use 20% for eg) = £1000 tax releif.

If you hadnt had ANY mileage allowance payments off your employer, youd be due a tax refund of £1000

If you have had mileage payments off your employer, then you net the total payments already received off the amount calculated as qualifying for tax releif

Eg - if your employer had paid you a flat rate of 25p per mile, then you've already had (12k x 25p = £3000) off your employer.

Therefore, youd be due tax releif back (using the example above of (£5000 - £3000 = £2000 x 20%)


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## Taxboy (Aug 23, 2006)

Do you have to buy? If not could you not use the car alowance on a lease car - then you don't have a large chunk of money invested on which you are paying interest on a depreciating asset


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## justina3 (Jan 11, 2008)

MDC250 said:


> OP is an Advance customer with HSBC, suspect the best rate with FD will be similar if not the same as the Advance headline rate with HSBC, with both banks being in the same group?
> 
> Can't remember which comparator site it's on but seem to remember one giving stats on what % of customers get offered advertised rates. I've gone by that previously and its served me well.


I have been with rbs for over twenty years even paid of two commercial mortgages didn't make any difference I still got a better deal elsewhere


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