An egg-cellent loan (sorry, had to be done - Egg Loans) (egg loans)

Member Name: Pandora321

Product:	egg loans
Date:	20/07/09 (162 review reads)
Rating:

Advantages: Flexible loan with no over/early payment charges, helpful staff

Disadvantages: Automated phone system, taking out at a loan at all

I've had an Egg loan for the last 4 years after I consolidated my many credit cards. I've found Egg to be, in the main, one of the better banking-type companies I've had to deal with (as a serial credit card holder I've dealt with many different ones). Here are my pros and cons to a loan with Egg.

~Background to Egg~
Egg is an online UK bank based mainly in Derby that began in 1998. As an online bank there are no branches you can walk into, although you can phone a human if you need to. Egg claims to be the world's biggest online bank and sells many different financial products including current and savings accounts, loans, credit cards, mortgages, ISAs and insurance.

~A little aside on loans in general~
Over the years I've run up a monster amount of debt that I'm now having to deal with, and I've learned a lot from my mistakes. Before you even apply for a loan, firstly, ask yourself seriously - do you really need whatever it is you're planning on buying? Without meaning to preach, many people (me included in the past) buy lots of stuff on credit that we never actually needed in the first place. If you don't need it - don't buy it.

Secondly, can you afford it? A loan is not free money (contrary to my previous mindset).; you do actually have to pay it back, and it takes a lot longer to pay back than the enjoyment of whatever you bought is likely to last. If you can't afford to save up for it, you probably shouldn't be buying it in the first place.

Finally, carefully plan to only borrow as much as you can afford to be paying back each month. Trust me when I say that you really don't want to get to where I did with £38k in debts and £700 in minimum payments each month seriously hampering your life. Avoid getting into debt at all costs if you can!

Right, lecture over! You've decided that what you want is necessary, is worth the extra interest (rather than saving up for it), and you can afford the monthly repayments. So on to Egg itself.

~Pros~
1. An Egg loan is easily arranged (just go to their website www.egg.com, or call them direct, and apply) and, if approved, the money you borrow is paid quickly into the bank account you specify.

2. Egg loans have variable rates. Mine's been on 6.7%, which is fantastic for a long-term loan, (although I see they're advertising around 13.9% on their website now - if this is the interest rate you get offered then run a mile).

3. Unlike most of the other loans I looked at, Egg allow you to make overpayments on your loan, or even pay it off in full early without any charges - a small overpayment each month can make a real difference to your interest costs over 4-6 years and, if you're suddenly flush, you've got the option to unshackle yourself from this debt early without the usual penalty charge.

4. Egg allows you to take up to 3 payment breaks each year, throughout the time of your loan. Although this increases the overall interest you end up paying, it's a good backup system for a month where you have a giant emergency dentist bill or a cashflow problem. I've taken 4 or 5 over the years (3 in one bad year), and they're easy to arrange. You just ring up (before the date of your monthly payment), ask for a break, give them the reason why and they will tell you your new monthly repayment amount (it goes up slightly due to the missed payment); you agree to it and then they put it through the system. Easy.

5. Egg has been surprisingly flexible for a bank. I had a few payment breaks so the monthly payment amount became larger than I felt was sensible so I called them up to see what they could do. They were happy to reschedule the entire loan for me so that I pay less each month, but keep paying for longer. Yes, it increased my overall loan repayment a little (which is probably why they were quite happy to reschedule it) but it markedly decreased my stress levels when trying to find my payment each month as it became a lot more affordable and I could pay more off my higher-interest debts instead. Other banks over the years have not had such a flexible mentality to my debts so I really appreciate Egg's flexibility and helpfulness.

6. Egg have a clever 'money manager' online account system where you can put in all your online banking/credit card account details (including non-Egg accounts) once, and you can then access these accounts by simply logging on to your Egg account, without the need to input all the other details again. This is very helpful when, as I used to, you have 5 credit cards, 3 bank accounts and a loan - you only have to remember one set of passwords for all your accounts and you can keep an eye on your finances much more easily. I haven't had any problems with their online security.

7. Egg, on average, has excellent staff on the end of the phone. I've only encountered one unhelpful person in tens of phone calls over four years; the rest have all been friendly, courteous and very helpful. This beats all my other banking companies hands down and is in marked contrast to one that will remain nameless (for now!).

8. In fairness to Egg, they paid back my PPI as soon as I claimed they had mis-sold it - in full and without any quibbling.

~Onto the cons...~
1. Although, once you get through to a human, the phone service is excellent, actually reaching a human in the first place can be a protracted process of repeating your postcode five times until the automated computer finally recognises what you've been saying all along. 300 options and needless automated info about your account later you finally reach a living person. It can be very frustrating, but all my banks seem to have it so Egg is not alone in this pet-hate of mine.

2. Their website seems to be down quite often on Sundays, just when I want to update my accounts online.

3. Getting a loan so easily can land you into debt you should never have taken on - again, not only an Egg problem.

Overall I'd recommend a loan with Egg, as long as you can get a decent APR deal. My final comment, though, is a painful lesson learned by me: don't take out a loan to consolidate all your credit cards, and then run up all your cards again...

Summary: A good loan company but avoid getting a loan out at all if you can