Why Nothing Being Done?

[Jonnybegood]

A guy at work with me was telling on Friday of the rates he has been offered on a £10k unsecured loan, he assures me he has no CCJs etc and over the last 5 years has had 2 small loans, both repaid in full with no missed payments.

Best rate on the high street 8.9%, and theres me with £10k sitting in the accounts of one of the banks he mentioned earning a measly 1.7%, Which I am told is a good high street instant access rate in the current climate by my FA.

This is modern day robbery, when you sit down and look at what a financial institute is giving you and what it is charging others, they have never been in such a good position to beef up their reserve whilst at the same time ripping off all those taxpayers that have albeit unwillingly supported them over the past 18mths.

Will the day ever come when we do get something back from the banks, at this rate they will be back turning over the profits in no time at all.

I am very tempted to lend this money directly to this guy at an agreed rate for both of us to benefit, but there are risks and do I really want the hassle, the legality etc.

[Charterhouse]

Go work out what the default rate on unsecured loans are then come talk to us.

1.7% on on-call money ain't that bad considering base rate is 0.5%. You could get closer to 5% if you made a real effort for it.

8.9% is also not that bad at all - how long is it for? I'm betting it's a multi year loan - if you were prepared to put your money away for the same period you'd get a lot more than 1.7%. Finally, if you really want to do this, you can at zopa.

Get clicking and stop moaning, put your money where your mouth is...

[wickywackywoo]

A guy at work with me was telling on Friday of the rates he has been offered on a £10k unsecured loan, he assures me he has no CCJs etc and over the last 5 years has had 2 small loans, both repaid in full with no missed payments.

Best rate on the high street 8.9%, and theres me with £10k sitting in the accounts of one of the banks he mentioned earning a measly 1.7%, Which I am told is a good high street instant access rate in the current climate by my FA.

This is modern day robbery, when you sit down and look at what a financial institute is giving you and what it is charging others, they have never been in such a good position to beef up their reserve whilst at the same time ripping off all those taxpayers that have albeit unwillingly supported them over the past 18mths.

Will the day ever come when we do get something back from the banks, at this rate they will be back turning over the profits in no time at all.

I am very tempted to lend this money directly to this guy at an agreed rate for both of us to benefit, but there are risks and do I really want the hassle, the legality etc.

Essentially they are allowing the banks to rebuild their balance sheets by stealing from savers.

I try very hard not to keep money in a bank where they can pay me a pittance and lend it out to other people for far more.

I have lent money to a couple of people I trust completely and charge then 5% (tax free of course ) . I also have physical gold and silver which benefits nobody but me.

Edited to add: Another reasonable option is to spend the money on some solid high yielding shares. I believe shares like BP, Shell, Glaxo etc yield something like 3-5%.

Edited August 9, 2009 by wickywackywoo

[Charterhouse]

Essentially they are allowing the banks to rebuild their balance sheets by stealing from savers.

I try very hard not to keep money in a bank where they can pay me a pittance and lend it out to other people for far more.

I have lent money to a couple of people I trust completely and charge then 5% (tax free of course ) . I also have physical gold and silver which benefits nobody but me.

Edited to add: Another reasonable option is to spend the money on some solid high yielding shares. I believe shares like BP, Shell, Glaxo etc yield something like 3-5%.

You want it both ways don't you - high savings rates and low mortgage rates...

If you're so convinced the banks are stealing from you there's no issue putting it all under the bed...

[wickywackywoo]

You want it both ways don't you - high savings rates and low mortgage rates...

If you're so convinced the banks are stealing from you there's no issue putting it all under the bed...

Er, no - I don't want low mortgage rates as I don't have a mortgage.

Why would I put it under the bed? I've just outlined several options above that don't require being fleeced by the banks and give me a decent return.

Div

[Charterhouse]

Er, no - I don't want low mortgage rates as I don't have a mortgage.

Why would I put it under the bed? I've just outlined several options above that don't require being fleeced by the banks and give me a decent return.

Div

3-5% is not a "decent return".

[wickywackywoo]

3-5% is not a "decent return".

But it's better than sticking it under the bed, yes?

[Charterhouse]

But it's better than sticking it under the bed, yes?

I think we can probably agree on that hehe.

Hell I'm not an investment hero by any means I've done ok this year but like a lot of people I'm wishing I'd had the balls to get into equities back in March.

Btw, I was thinking earlier, you could probably get your friend to list on Zopa. If he really is a decent risk then he will get a loan around the 8% mark probably, and you can lend to him yourself at whatever rate you want, with whatever protection (I don't know how extensive that protection is though) the site offers.

[Dubai]

But it's better than sticking it under the bed, yes?

I might as well stick my paltry savings under the bed.... 0.19% from HSBC!!

At least if the bank goes bust, you have your cash ready to go...... not like those poor gits who banked with that Icelandic outfit, etc.

[InternationalRockSuperstar]

A guy at work with me was telling on Friday of the rates he has been offered on a £10k unsecured loan, he assures me he has no CCJs etc and over the last 5 years has had 2 small loans, both repaid in full with no missed payments.

Best rate on the high street 8.9%, and theres me with £10k sitting in the accounts of one of the banks he mentioned earning a measly 1.7%, Which I am told is a good high street instant access rate in the current climate by my FA.

This is modern day robbery...

nobody's making you lend your money to the bank at 1.7%.

if you think you can get better returns elsewhere then invest your money elsewhere.

[AvidFan]

Essentially they are allowing the banks to rebuild their balance sheets by stealing from savers.

The banks have put in their own positive yield curve, so to speak. There's no movement in the economy - in fact, we're on the edge of an abyss, so why not price money high during this catastrophe, selling borrows on its scarcity and selling savers on the lack of desire for new debt?

Non of this is true. Look at Barclays - record profits but they went to Qatar for a a few billion at 14%. Who wouldn't have gone for that if anything like it had been offered in the UK.

If the banks narrowed that gap, they'd be less profitable for sure, but retail savings would flow in and they'd achieve their de-leveraged aims a lot sooner.

Edited August 9, 2009 by AvidFan