# Personal loan



## craignewcastle (Aug 9, 2011)

Guys,

I bank with HSBC however want a personal loan with a local bank because of lower rates, is this possible? Or do I have to switch bank?

Thanks


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## Canuck_Sens (Nov 16, 2010)

craignewcastle said:


> Guys,
> 
> I bank with HSBC however want a personal loan with a local bank because of lower rates, is this possible? Or do I have to switch bank?
> 
> Thanks


You will have to transfer your salary to the new bank. It is a requirement. Some banks do not require, but the rates are higher. You must also obtain a no liability letter from HSBC. Your lending bank will tell you.

You can leave your HSBC account open if you so desire..your choice.

Also, bear in mind that banks are quoting using profit rates. Ask them to quote you in balance reducing rate. People are caught off guard thinking they are paying less interest when in reality they are paying a lot more.


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## Red_Nosed (Nov 30, 2011)

Canuck_Sens said:


> banks are quoting using profit rates.


Is that the Islamic loan products specifically or all loan products irregardless?


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## rsinner (Feb 3, 2009)

Red_Nosed said:


> Is that the Islamic loan products specifically or all loan products irregardless?


Not necessarily for Islamic loans - for example, most car loans do not have a reducing balance concept.

I think a number of personal loans offered these days are on a reducing balance method. Just make sure that you are using the right number when you are comparing between banks.


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## m1key (Jun 29, 2011)

Canuck_Sens said:


> *You will have to transfer your salary to the new bank. It is a requirement. Some banks do not require, but the rates are higher. You must also obtain a no liability letter from HSBC. Your lending bank will tell you.*
> 
> You can leave your HSBC account open if you so desire..your choice.
> 
> Also, bear in mind that banks are quoting using profit rates. Ask them to quote you in balance reducing rate. People are caught off guard thinking they are paying less interest when in reality they are paying a lot more.


With HSBC and didn't need any of that. Worked like it would in the UK except the DD to pay back installments.


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## Canuck_Sens (Nov 16, 2010)

rsinner said:


> Not necessarily for Islamic loans - for example, most car loans do not have a reducing balance concept.


 Precisely....and people do not understand that when they want to liquidate the loan they are being ripped off. Under Islamic finance, the lender has the right to get all the "profit" and a discount is negotiated if you want to pay off the outstanding balance in full.

Just run a quick analysis simulating how much you would have to pay to liquidate the loan. You will realize that your principal in this case is lower than the discount offered by lender if you were to pay it off on the spot.



rsinner said:


> I think a number of personal loans offered these days are on a reducing balance method. Just make sure that you are using the right number when you are comparing between banks.


If you are not concerned about the legal implications of having a sharia product (the rules are different, the rate is calculated differently and so forth) make sure you ask whether it is a Islamic product (sharia compliant) or not. 

If it is then you ask them to quote you under the balance reducing method. This will give you a better understanding of how much you are going to pay. I am making the assumption that you are familiar with the Balance reducing method.

Bear in mind that they will not include any charges when they calculate the APR (e.g. to open a credit facility there is a charge) when they calculate the rate...you should do that.


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## Canuck_Sens (Nov 16, 2010)

m1key said:


> With HSBC and didn't need any of that. Worked like it would in the UK except the DD to pay back installments.


I said that it is a requirement for some banks and for others it is not. For those who do not mandate the salary transfer the rates are higher. (they do not have your salary to back them up)


I did not understand your point elaborate.


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## m1key (Jun 29, 2011)

Canuck_Sens said:


> I said that it is a requirement for some banks and for others it is not. For those who do not mandate the salary transfer the rates are higher. (they do not have your salary to back them up)
> 
> 
> I did not understand your point elaborate.





> You will have to transfer your salary to the new bank.


You said "you will have to", not "you may have to"



> It is a requirement.


Again. "May be a requirement" would have been correct.



> You must also obtain a no liability letter from HSBC.


I was stating that this was not a requirement for me, a HSBC customer.


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## Canuck_Sens (Nov 16, 2010)

You may have to transfer your salary to the new bank. It is a requirement to transfer [for better rates]. Some banks do not require, but the rates are higher. You must also obtain a no liability letter from HSBC. Your lending bank will tell you.

You can leave your HSBC account open if you so desire..your choice.

Also, bear in mind that banks are quoting using profit rates. Ask them to quote you in balance reducing rate. People are caught off guard thinking they are paying less interest when in reality they are paying a lot more.

Hope Mikey is happy, he is right.

I was too lazy to go back...and fix it. I started off with the transfer because it was mandatory, but these have changed banks are offering the no transfer option at expense of a higher rate and that popped up in my mind while I was half way through the post.


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## m1key (Jun 29, 2011)

Canuck_Sens said:


> It is a requirement [for better rates].
> 
> I am a HSBC customer too. And they require a salary transfer [for better rates.]
> 
> For not so good rates you do not need to transfer your salary.


So why didn't you say that rather than say requirement, must and maybe in consecutive sentences?

The OP was not asking what HSBC were offering or required (your last post). Your original post read a little contradictory (in my opinion), so I offered some clarity from my personal experience. I made no statements with regards to rates, better or otherwise.


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## Canuck_Sens (Nov 16, 2010)

The post you just posted that included my comments does not exist anymore ( removed that comment) have a look (go back to page 1)




m1key said:


> So why didn't you say that rather than say requirement, must and maybe in consecutive sentences?
> 
> The OP was not asking what HSBC were offering or required (your last post). Your original post read a little contradictory (in my opinion), so I offered some clarity from my personal experience. I made no statements with regards to rates, better or otherwise.


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## m1key (Jun 29, 2011)

Canuck_Sens said:


> The post you just posted does not exist anymore I was re-editing have a look


Much clearer 

I was only concerned the OP might not understand that he has a choice about salary transfer, even if at the expense of rates.


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## Canuck_Sens (Nov 16, 2010)

I agree with you. That was bad grammar from my side and I wont be that lazy again( Ok I might lol). I could have fixed and simply chose to let it go


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## m1key (Jun 29, 2011)

Canuck_Sens said:


> I agree with you. That was bad grammar from my side and I wont be that lazy again( Ok I might lol). I could have fixed and simply chose to let it go


My grammar isn't exactly your Queen's English. I blame Maggie Thatcher


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## fcjb1970 (Apr 30, 2010)

Just don't buy it till you have the cash. imo, outside of a credit card taking any loan in this country is an insane idea.


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