My Flexible Friend (cahoot.co.uk Flexible Loan)

Member Name: bubblecat

Product:	cahoot.co.uk Flexible Loan
Date:	08/05/06 (1003 review reads)
Rating:

Advantages: Only pay interest on what you withdraw, repayments can then be borrowed again

Disadvantages: you could be locked into a loan for life, online bank so need access to a pc

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.

Customer 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.

My opinion:

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!

Summary: Online bank loan which offers lots of flexibility