“ 6.9% APR however much you borrow. Minimum monthly repayment of £50 or 2% (whichever is greater). „
My interest rate went from about 12% - which wasn't great but the flexibility of the loan set up was outstanding - to 21% within a few months!!!I managed to pay out the loan with a credit card 'cheque' so it was a balance transfer to a more realistic 6.9%.I wonder if all flexible loan customers know about the rate change?
From 4Q 2006, Cahoot are no longer offering the 'Flexible Loan' to new customers. Further, they have dropped a bombshell on existing customers by pushing up the interest rate out of all proportion to the increase in the Bank of England base lending rate. In November 2006 the interest charged on my loan was 9.1% APR. This increased, on 01 December, to 9.4% APR (fair enough), but with effect 14 December 2006 the APR has increased to 14.9%!!! At the same time Cahoot are offering alternative Fixed Rate loans, which are available only through their parent company Abbey. The policy clearly seems to be to persuade existing Cahoot customers to transfer their loans to Abbey - I can think of no other justification for this ridiculous and extortionate increase in APR. Fortunately I had very little money outstanding on my loan and was in a position to clear the balance before the 14th December 2006. I expect that many thousands of other Cahoot customers will not be so fortunate.
I needed a loan which I could pay back early without any penalties, so I took out a 3 year loan which I new I could afford, and was able to pay it all off withing the 1st 15 months with out any quibble. Perfect and I was hoping to use them again but just get linked now to the Abbey who do not seem to do this. Shame!!
A few years ago I found myself in some financial difficulty and deperately applied for several loans. I was accepted for one with an organisation I won't name here, but the interest rates were phenomenally high so on a £3000 loan I was paying back £140 a month.
After a while these payments were beginning to take their toll, especially as by this time I had spent the full £3000 and wasn't in a much better position than beford and now I had these payments on top of all my normal expenses!
I had another browse and Cahoot popped up as one of the options. I had seen some of the slightly strange adverts on tv before( you know like the one where they are playing 'poker' but have changed it to cahoot and they say about one of the players 'look he's got cahoot')and thought I wouldn't stand a chance, but had a closer look anyway.
I was about to apply for a standard fixed loan where you borrow a fixed amount and pay back that amount over a specified time period. But then the words 'flexible loan' caught my eye.
So What exactly is a flexible loan?
Well like a fixed loan you apply to borrow a certain amount of money. however unlike a fixed loan, you do not pay this back over a fixed term. The money is paid into what I can only describe as an account and you withdraw as and when you want to and you only pay interest on what you actually withdraw. Also, because there isn't a fixed repayment period, you can pay the loan off in full whenever you like without incurring early repayment penalties.
Confused? I was a little as well, but the most basic way I can think to describe it is that you have an account opened and the amount you borrowed, say £5000, paid in. You can withdraw money by transferring either to an existing Cahoot account eg credit card, which is immediate, or to a bank account which takes 3-5 days.
Whatever money you didn't withdraw remains available in your 'account' and you pay no interest on this amount because in effect you haven't actually borrowed it yet.
Now this is only the first good bit, now onto the REALLY good bit. As with any loan you make monthly repayments. The Interest is variable which isn't great as it always seems to be going up (it started at about 9% and is now about 11%). So they tell you what your minimum payment is and you can alter this online though only obviously to increase it or reset it to the minimum. I will talk a little more about managing your account in a minute.
Now the great selling point of a flexible loan is that once you have made a repayment, this money becomes available for you to borrow again! So you basically have a continuous loan. If you withdraw £2000 then pay back £200 you can then wothdraw that £200 again. Of course as with anything like this, you have to be aware of how much interest you are paying. If you only have £200 LEFT in your 'cahoot account' and your interest that month is £60, then you must leave at least £60 in your account to cover this. It is not like with a standard loan where interest payments are taken into account with your repayments. Cahoot take the interest DIRECTLY FROM YOUR LOAN ACCOUNT.
As long as you remember this you will be fine.
Right, now to the more mundane details of the account.
Cahoot is a member of Abbey and is available online only.
Once you have been accepted you can set up your username and password to access your account.
Your Online Account:
When you log on you can view all the accounts you have with Cahoot, such as current account, credit card, loan etc. to check your balance, purchases etc.
You can also change the minimum payments and set this for as long as you want ie if you want to pay £100 for a few months you can set the period to 3 months when the repayment will revert back to whatever it was before.
A very useful thing you can change is the billing date. If the date Cahoot has selected is not convenient for you, you can simply change the date. You can only do this a few times though as I suppose it can be quite difficult for Cahoot is people keep chaning their payment dates.
If you find it very difficult keeping track of your transactions online you can also request a duplicate paper statement though Cahoot charge £5 for this service.
Cahoot offer an online queston facility where you type in your query and the computer responds. I guess this gives it a more personal touch than the usual FAQs you get on these sites where a number of pre-answered questions are available to view. The problem is you have to be quite precise in the question you answer sometimes or the computer will respond with 'sorry I didn't understand the question'. Of course if you type in a one word query such as 'flexible loan' the computer will then show you a list of relevant topics.
If this automated service cannot help you, you can then opt to contact Cahoot directly by email and someone will aim to get back to you within 48 hours. I have only had need to contact them a couple of times and they have always been very helpful to me.
Can't you tell? I love Cahoot! I now have both a credit card and a flexible loan with them and both are great! All the various accounts offered compliment each other. You can swip swap credit limits so if you have a £1000 credit limit on your credit card and £5000 on your loan you can spread the limites out ie you could add another £1000 to your credit card fro your loan limit so you would then have £2000 on the card and £400 on the loan. Also any payments/transfers made from one account to the other are instantaneous which is handy if you are late paying your credit card bill!
Although this wound me up at the time, Cahoot are also very scrupulous. Unlike some banks who constantly up your limit as soon as you ask, Cahoot do a thorough review and if they feel you won't be able to manage you can request til you are blue in the face and they won't keep getting you into more and more debt.
This flexible loan has been a lifeline to me though I am aware that I now have more financial obligations. Not being trapped with a fixed loan makes lfe so much easier and the ability to continue to use the loan over and over again has definitely made my life much easier.
If you are looking for a loan I would recommend this one everytime!
~~~~This is an update~~~~ Cahoot are offering the chance to have £50 credited to your flexible loan account. All you have to do is simply transfer a balance from another credit or store card of £1500 or more before the end of December. If you are an exisiting customer you can go ahead and do the transfer now, if you haven't yet opened an account, get cracking! The £50 cash back will be credited to your account in February and you need to keep the balance on your loan until then. Check out the T&C's at www.cahoot.com. The same offer also applies to transfer on an exisiting or new credit card. ~~~~~~~ Ok, you may or may not have read my previous op about the basics of loans; I will now tell you about Cahoot. I wrote the other review and posted it separately as otherwise it would have been too long. I also think it is important to know the basics about loans before taking one out. It might also help you understand why I chose Cahoot above other lenders. Cahoot could offer me the amount I wanted at a rate I could afford, with daily calculation on interest and above all FLEXIBILITY! THIS IS WHAT CAHOOT OFFER (as stated on their website) **** Borrow any amount up to your credit limit and Only get charged interest on the amount you actually use. Withdraw additional funds using our online transfer facility, Pay off your credit, store card or other existing loans to make the most of our excellent rates **** They offer loans from £1000 to £15000 and the amount you apply for doesn't have to be the amount you withdraw. You may need to borrow £2000 now for example but you know you will need another £1000 in 3 months time. You simply ask for a credit limit of £3000 of which they will either approve or not. You arrange to withdraw £2000 instantly and you then withdraw the other £1000 when you are ready. This works like a credit card or bank account and the best of all you are only charged int
erest on the amount that you withdraw not on the £3000 that you were approved. This simply sits in your Cahoot account until such times, as you need it. You never have to withdraw this money if you don't want but it is there just in case. This is far more convenient than having to apply for another loan and going through the application/credit checks again. It is so easy to withdraw funds by logging on to your Cahoot homepage and inputting the account details of the bank you wish the money to go, this can be done the same day with a Cahoot account or within four working days for other accounts. At the time of applying for the loan you can request an initial transfer amount, this will be actioned as soon as the loan is up and running. As stated you can use the money to pay offer other cards or loans. ~~~~CAHOOT ALSO SAYS~~~~ ****Your interest rate remains the same however much you borrow. Reduce your repayments when demands on your income are high. Low minimum monthly repayment of £50 or 1.75% of the remaining balance, whichever is the greater? Increase your payments if you want to pay more. Pay back your loan in full at anytime without penalties**** Once your interest rate is agreed it doesn't matter if the whole amount is withdrawn, you pay that rate regardless. The ' typical' APR at the moment is 7%; this DOESN'T mean that you will be offered this rate. It is dependent upon your credit rating, credit history AND the amount you borrow. Remember what I said in my 'What You Need To Know Before Taking A Perosonal Loan' op about the more you borrow the better the rate? Well although this isn't set in stone, I was offered a rate of 10% borrowing £3000 and a family member was offered 7% on £4000, I'm pretty sure this was more to do with the amount rather than credit worthiness although his income IS HIGHER than mine. It will tell you the APR you are being offer
ed before you proceed to tailor the loan or arrange any withdrawals. When the paperwork comes through you can also see that the APR has stayed the same of that offered. You can pay whatever you want each month providing it is a minimum of 1.75% of the amount outstanding or £50 whichever is the greatest. Therefore you can arrange to pay £200 per month on a borrowing of £3000 initially but pay the minimum payment if income is tight for a short period without penalty or having to make any agreements. Just make sure that you go back to your regular amount as soon as possible as otherwise it will take forever to pay off. You can work out b efore proceeding with the loan how much you will need to pay in order to finish the loan at a set date, if you check out other company's first, bear this in mind. Many companies only allow you to repay back your loan in six monthly blocks i.e. 12,18,24,36 months, without Cahoot this is not the case, you can choose any time in one month increments. The opposite also works; if you get a pay rise or you have some spare income you can pay one off amounts or increase your regular monthly payment. This will enable you to repay the loan off earlier and also save the amount of overall interest you would pay. As the loan is flexible and interest is calculated daily there is no messing about with interest refunds or penalties, you can pay the loan off at any time. Even if you pay back all that you borrowed your Cahoot account remains open should you wish to withdraw again, if after 12 months there has been no account activity they have the right to close the account. Making additional payments is easy and done on line by accessing your Cahoot Homepage and clicking making payments, you can change the regular amount or make a one off payment at any time. You can also check easily when your payment is due and how much you are currently paying. When applying for the loan you can choose your own payment date, another fanta
stic feature that makes this loan all the more easy to operate. You can of course apply for repayment protection on your loan should you wish, full details are available on the website. HOW DO YOU APPLY As Cahoot is an online bank you need to go to www.cahoot.com and on the homepage you will see the advertisement of 7.00% APR for loans. If you click on the banner it will tell you a little more about it and the option to calculate your repayments or apply. I wouldn't apply straight away, find out as much as you can about the loan, work out your payments and then apply. Always read the small print! Before you apply you have to meet certain criteria. You must be over 21 years of age, have been permanently resident in the UK for at least 3 years, not currently bankrupt or have a court order against you, have a valid email address and a 128 bit encryption on your pc. You can see that a young person or anyone with poor credit is unlikely to be accepted. You will need to follow a 3-stage application process; the first stage is where you create a username, password and memorable data. You will need to hand, your mother's maiden name, your income and employment information, address details for the last 3 years and your bank details. You then need to choose your products; although you may wish to only apply for a loan you will have the opportunity to apply for other products and repayment protection insurance. You will know within minutes if you have been 'conditionally accepted' full acceptance will depend upon final credit checks and you supplying proof of address. You will receive the completed application form through the post after you have submitted it online. You need to check all the details and then return it with the 2 proofs of address, originals and not copies. These are returned promptly within a couple of days. Only when you agree to the terms and conditions and return the form will t
he loan be set up. You do not have to proceed if you have changed your mind. Step 3 is to tailor your chosen products by selecting when you wish your statements to be produced (the payment is due 15 days after the statement date) what account you wish the direct debit to come from, how much you wish to initially withdraw etc. That's it! You will be sent an email confirming your 'conditional acceptance' and it will give you instructions on what to do next. This email is almost instant and myself and a member of my family received the application pack within 3 days. Within a couple of days of returning it the account was set up without any problems. I opted to have some money transferred to my bank account as soon as the loan was active. This was done without any further correspondence from myself and I received the money after 3 days of my loan being active. The family member opted to wait until the loan was accepted before deciding how much to withdraw; this was partly due to a settlement figure being required to pay off another loan. For this you need to access your account online using the previously created password etc and request the amount to be sent to a bank of your choice. This was done without any problems, remember you only pay interest on what you withdraw not on the amount of agreed credit limit. As this is an online company you will get notification by email of your statements and you can review them online. Your debit balance will appear in red and you can see exactly how much interest has been charged along with when payments are due and what has been paid. Statements appear online for 12 months and you are advised to print a copy. You can request a copy statement but this will cost £2, any actions you may wish to take will have the charge clearly stated before you proceed with the request. OTHER INFO Once you have returned the forms and the account is set up you will receive a confirm
ation email. With my loan I received the email before I revisited the website. With the family member we checked to see if the loan was set up in order to make a withdrawal and it was, at this point we hadn?t received the email confirmation but it arrived the next day. You can in the future request an increase in credit limit but not in the first 3 months. You can change your details online. You can withdraw and make additional payments online. No paper statements will be posted to you; statements are available to view online. You can contact Cahoot online or via phone. I had to contact them as I forgot my accou nt details and I did have to wait around 10 minutes but I remembered the details as they answered! This was longer than I would have liked to wait to be answered but he was friendly and ensured that I had solved the problem before disconnecting. They do have an online help facility but if all else fails give them a ring on: 08706000655 You can opt to receive email and text messages notifying you of any account transactions or messages that are posted for you to read online. Due to privacy they will post messages online rather than email them to you. The email you receive will only be a notification of the message, not the message itself. Cahoot supports 128-bit encryption technology and you need to make sure your browser or wap mobile support this. Encryption is a means of encoding information in to unrecognisable data as it is transferred to and kept on the Cahoot system. Each time you access your account you will need your username, password and be able to answer a security question. Cahoot guarantees that you will never have to pay for a banking activity that you haven't approved. Cahoot offers many other products including bank accounts, savings account, credit card, share trading, insurance and mortgages. Cahoot is a division of Abbey Natio
nal. Recommended for flexible personal loans. www.cahoot.com
Anyone having an idle look through my opinions may notice that I had been in the market for a new car, possibly an import. Unlike going to a UK dealer, who may have all kinds of finance packages, ranging from interest-free credit (on cars they want to shift!) to more normal HP arrangements and 'balloon payment' schemes, importers are going to want MONEY. This leaves most people with two choices, save up for it, or borrow money elsewhere. It was whilst perusing the icebergcars.com site that I followed their 'Finance Partners' link, which led me to www.cahoot.com, an on-line subsidiary of Abbey National plc. So, although I still hadn't at that stage decided what to buy and who to buy it from, I set the loan up. Under normal circumstances, this would be a silly thing to do, since the repayments would start straightaway. Not so with Cahoot - with them, all I have done is set up a loan account with the money still sitting there, costing me nothing. Unlike HP, this is more like a bank account with zero balance, and an agreed overdraft facility. Therefore, if you're not overdrawn, it costs nowt! SETTING THE LOAN UP This was relatively simple to set up over the internet, requiring such details as income, level of existing debt and personal details. In a way, I was glad that they turned down my initial request for £11,000, in favour of £8,000. This does at least show that they take your details into account before making a decision, and aren't prepared to follow the credit card route of 'up to your limit? Please, have some more limit!' OK, I know there isn't a little man sitting there approving this stuff. - it's more likely to be some mathematical algorithm running in the background, but all the same, it was interesting to see this is action, as this is the first loan I have asked for since becoming a 'pensioner', on somewhat less money than before. One plus point though. Being on an index-linked pension from a large employer meant I didn't have to shell out for redundancy insurance. After all, if I haven't got a job..... I purposely didn't make a an application based on combined incomes, since we could probably have raised a 2nd mortgage! Of course, certain items need a physical signature, like the credit agreement, so the account can't be used until this is returned with a couple of 'proofs of address' - gas bills etc. You then get an e-mail to confirm that the account is ready for use. USING THE ACCOUNT You log on through a three-line sequence, ID, password and the last of which rotates between 'Special Date', 'Mother's Maiden Name' etc - I'm always tempted to put Marian there! Yeah, yeah, I know, and I'm Friar Tuck! Having already nominated a current account to transfer money TO, kicking the loan off is easy. Just input the amount wanted up to the maximum amount agreed and confirm where it's to go. A minimum payment of the greater of £50 or 1.75% of the balance is taken via Direct Debit (D/D) every month FROM your nominated account. You can opt to make a larger regular direct debit payment on line, and even more flexibly, thanks to the fact that the loan account has a normal sort code and account number, you can also opt to add to this amount by normal bank transfer, thereby shortening the term of the loan. If you left it to the minimum automated D/D, it would take 13 years to pay off the loan*, even at their very reasonable APR of 8%.(variable) - not recommended for a car loan, since the purchase may be recycled as a 'patio set and Tesco plastic bags' by then! However, at this APR, this is streets ahead of all those day-time TV ads exorting you to 'reconsolidate' credit card debt. *One of those fascinatingly-depressing facts that you can model with MS E
xcel! Having previously chosen your statement date, the D/D will be taken 15 days later, and any extra payments made will reflect in the reduced D/D next month. CONCLUSION This has most of the flexibility of a credit card without the punishing APR. It is easy to set up, and the loan term can be shortened to suit your financial purposes. Partly redeemed loans can be re-borrowed up to the agreed amount, so this account could be yours for life, always there in the background to meet life's little emergencies head on. The more you pay off, the less it costs, with no early redemption penalties. Surely, this really is our flexible friend.
I choose Cahoot's flexible loan because of the advertised rate of 8% APR and flexible repayment options. It is unsecured, the interest is calculated daily and there are no early repayment penalties. Setting Up ---------- Applying online is easy, you need a secure connection, you fill in your personal details, income, bank account details, etc and how much you wish to borrow. They then tell you if you have been accepted or not. The application takes about half an hour. A credit agreement gets sent to you in the post and you have to read and sign it and send it back along with proof of your address. All this takes about a week then the loan is ready for withdrawals. You then login to your account on their website where you can transfer money to your bank account. This is supposed to take at least four working days if your current account is not with Cahoot, mine only took three days. You can also use your online account to look at statements, change repayments, etc. You do not pay any interest until you withdraw money so it just sits there until you need it. It says in the small print that they can close your account after a year of inactivity either before you start using it or after it has been paid back. I don't know how fussy they are about credit records, I have only ever had a couple of credit cards and they accepted me. They might not accept people with bad credit though. Repaying -------- I choose a limit of £5000 and was offered a rate of 8%. I ended up only using £4000 of it but the other £1000 is still available to me if I need it. You can apply to increase your limit at a later date if you wish. It kind of works like a credit card, where you have a direct debit which takes the minimum amount of £50 or 1.75% (whichever is higher) from your bank account once a month. You can choose which day it is debited so you can have it coming off the day after you get paid, for example.
You have a number of repayment options: • Pay only the minimum amount each month. Doing it this way will mean it will take years to pay the loan off . • Arrange (online) for a higher regular repayment. There is a calculator on the website where you can specify how long you want the term to be and it tells you the monthly repayment amount. If you find that this amount is too low/high you can change it at any time. • Pay the minimum amount each month and make extra 'lump sum' repayments. The latter is my preferred option because it is the most flexible as the amount I can afford to re-pay changes every month. The only problem with this option is that you can't make 'one-off' repayments online, you have to do it via your current account. This isn't too much of a hassle for me because I regularly use telephone banking but if you had to go into your branch this would be a real pain. It takes four working days to transfer the money from a non-Cahoot current account to your loan. Customer Service ---------------- Before I applied for the loan I sent them an email asking for a couple of written quotations and asking a few questions, their response was prompt, answering the questions by email the following day and sending the quotations in the post. I also had to phone them up because I forgot my password, they were quite helpful and said they after they couldn't do anything until they had received my signed credit agreement (which was in the post) but I should phone back in a couple of days and they would send out a form for me to fill in. I didn't have to phone back though because I remembered it the next day. Doh! Summary ------- I am very pleased with my loan, I'm confident that it is a really good deal and I like being in control of my repayments. I think it's great that you can still withdraw money even after you have start
ed repaying because you never know when you might need it.