CCA wording advice

[Hayley1210]

Good morning

 

please could anyone offer at advice on a clause within a fixed sum credit agreement

which reads "we may from time to time increase or reduce rate of interest after giving 30 days

notice both as a result in interest rate changes which applicable to all borrowers.

 

We may vary the rate due to changes in our underlying fund or input costs.

 

Variations in the rate of interest under this agreement are not in line or linked to variations in BOE base rate"

 

Is this very dangerous ground ?? I thought fixed sum meant just that?

 

Any advice would be appreciated.

Many thanks

Hayley

[citizenB]

That would have been my interpretation of a "fixed sum" as well.

[ims21]

You can have a fixed sum loan agreement with a variable rate of interest which is what you seem to have here.

 

This line is the thing which stands out to me....

 

Variations in the rate of interest under this agreement are not in line or linked to variations in BOE base rate

 

It effectively means that they can charge whatever interest rate they like from time to time and personally I would not feel comfortable with that.

 

Who is the lender please?

[Hayley1210]

You can have a fixed sum loan agreement with a variable rate of interest which is what you seem to have here.

 

This line is the thing which stands out to me....

 

 

 

It effectively means that they can charge whatever interest rate they like from time to time and personally I would not feel comfortable with that.

 

Who is the lender please?

 

 

 

 

The lender is 1st stop homeloans for conister bank. It's secured. It's my husband applying because he is a

Taxi driver renting at £140 a week but because he's only been self employed a year he's struggled to get anything, the apr on this loan on my eyes is crazy but it would still earn him a car and be cheaper per month than his rent BUT having read the small print I can't accept the risk, especially on our house. Could they literally increase the interest to anything they wanted with no justification as to why?

[ims21]

A lot of lenders for secured loans will link their rate to the base rate so it cannot get out of control, so to speak.

 

This one, however, seems to give them a pretty free hand.

 

Bear in mind that on a secured loan your home could be at risk of you cannot keep up the repayments on the loan and of course any increase in interest rates makes the monthly repayment more expensive.

 

Have you tried other lenders?