My Home Finance has closed down its doors. MHF was founded in 2010 by the National Housing Federation that is a trade association for member social housing providers in England. Funding for the venture was provided by the Department of Work and Pensions (DWP), many social landlords and Wates Giving. They had 27 locations (assigned within existing housing associations). This was a surprising closure to hear about. They had been the dominant force in the instalment sector offering the cheapest pricing at 3 and 6 months. Their competitive £300 charges calculated as just £42.13 (3) and £64.76 (6). This scheme was championed by Iain Duncan Smith as a great way to beat the loan sharks and doorstep lenders.
Experian CreditMatcher was announced on the 7th September 2016. The UK’s largest credit reference agency has followed in the footsteps of CallCredit and Equifax in offering free lifetime data. This will supplement their comprehensive service (CreditExpert) that itself can be obtained at no cost on a 30 day trial, but from here on kicks in the £14.99 monthly fee. For those who haven’t yet taken advantage of the trial, we’d fully recommend doing this. One thing to address with CreditMatcher is that the Experian credit score may be made available, but this is only updated monthly whereas CreditExpert is updated daily. As well as this, you receive alerts, detailed reporting plus identity fraud insurance.
Frequent lender check ups are made to keep track of any recent service updates such as on costs, repayment options etc. It isn’t common to be met with closures, but on a payday lender search this is exactly what happened with BongaLoans, Reddies Direct and SafeLoans. Outside of this trio, Wage Payment and Payday Loans Ltd (WPPL) has been closed down by the FCA. They traded as DoshLoans, Payday Overdraft and WagePayday. We never got around to profiling these brands since they haven’t been permitted to lend since summer 2014. It has just been confirmed in July 2016 that their interim permission has been cancelled and the owner has a permanent ban.
At one time Wonga.com had their logo attached to the kits of Blackpool, Hearts and Newcastle United. There was always plenty of Wonga Football updates to keep track of through www.wongafootball.com. The initial contract was agreed with Blackpool in 2010 (>2015), Hearts followed in 2011 (>2014) and then came Wonga’s major Newcastle deal in 2013 (>2017). This 4 year contract was worth £24 million equating to £6 million per year. Jumping on to Blackpool’s kit during the 2010 season was a very savvy move. The Seasiders had just been promoted to the Premier League and they had bright orange shirts for the lender’s high impact blue logo to fit on to. Perfect for Match of the Day.
Earlier in May Google announced a new AdWords Policy on lending products that specifically targets “Payday Loans”. This ruling that will be put into action on July 13th 2016 will see a ban on payday loan ads where the repayment is due within 60 days of issue. In America they are also imposing a ban on any loan with an APR of 36% or higher. Some people may wonder whether this ruling is through a genuine concern for the vulnerable or could it perhaps be an act to boost their public image that has been dented through recent tax controversies? It has not been easy for the search giant to shake this, especially through the now popular “Google Tax” term.
Amigo Loans has maintained their status as the market leading guarantor lender in 2016. The key ingredient to their momentum has really been their continual approach to product development. There has for instance been a recent increase on the available loan amounts that previously headed up to £5000, with the limit now standing at £7500. There was past confusion on broker fees whereby it was unclear whether or not the customer was billed on a brokerage fee. It now states on their site that they pay commissions up to 20% of the amount borrowed. They’ll only be paying 20% on sums that are low, with capping likely being set at around £400.
Back in December 2015 we briefly covered Wonga’s 90 day loans that were being piloted on existing customers. The way it came across, we were expecting terms between 1 and 90 days, but it turns out that they have now fully rolled out a set 3 month product. Change was critical for the market leader after it was announced in 2015 that they had made heavy loss across 2014. They had issued 2.5 million loans (down from 3.7) and had lost some of their user base. There was a few scandals and they had a to adapt to industry price capping. It is worth updating that the latest financials report on an after tax loss over 2015 of £76.5 million.
The Sainsbury’s Loans were the cheapest that you could find on the market across the 2015 year. As was reported in early 2016, M&S swooped in with 3.3% APR to take the #1 spot, followed closely by their owner (HSBC) who charged just a few extra pence. The M&S leading rate has now been pulled and they charge 3.5%. HSBC haven’t however budged from 3.3%. Sainsbury’s now match this, but they get the bragging rights from going £0.02 cheaper. Their £10,000 12 month loans calculate as £176.96 with Nectar or £182.24 without. HSBC’S price is £176.98. Obtaining a Nectar card is simple. You simply ask for one at a checkout and validate it online.
Recent data published by Bacs has shown that Santander are very much reigning supreme in British banking. The Spanish maestro enjoyed remarkable growth up to summer 2015, acquiring a mass of fresh current account holders from the Big Four. With the exception of Halifax, it is clear that the British public are losing their patience with the majors; Barclays and the RBS Group in particular each look in poor shape. This data was published in January 2016 that has reported on the share of switches made between April 1st and June 30th (2015). They are running in 6 months arrears and the next set of results will be published in April.
Update: Sainsbury’s Hit Back with Cheapest Loans.
Sainsbury’s Bank delivered the UK’s cheapest personal loans across the 2015 year, but the supermarket giant has now been edged out in early 2016. M&S Bank may hold on to this position, or they may have set off yet another pricing war between the big players. For the best available banking rates you will of course have to opt for high loan sums, typically between £7500 and £15,000. We compare the banks at £10,000 over 1 and 2 years. Sainsbury’s came out best at 3.4% APR for their Nectar card holders, that calculated as £182.24 (12 months) and £352.40 (24 months). Without a Nectar the rate is 3.5% that translates to £187.64 and £362.72.
Best Value Sectors:
2) Finance (P): B/H/L @ 4.6%
3) 12 Month (P): First Direct @ 0.011%
4) Finance (Sub): Advantage @ 29.26%
5) Guarantor: UK Credit @ 0.053%
6) 12 Month (Sub): Likely @ 0.063%
7) Logbook: Car Loan Centre @ 0.108%
8) Instalment: Fair Finance @ 0.157%
9) Doorstep: Mutual @ 0.165%
10) Payday: Drafty: @ 0.180%
11) Short-Term: Drafty @ 0.180%
* Daily interest to 3DP
* Finance rates shown as APR
* (P) = Prime | (Sub) = Subprime.