Mike_B wrote:
> In message <4%9Fj.27084$XI.333@text.news.virginmedia.com>, Ronald Raygun
> writes
>>Graham Murray wrote:
>>>
>>> Maybe someone needs to remind the banks of the old adage "you cannot
>>> have your cake and eat it". Either the banks should charge higher
>>> interest rates, as they do on credit cards, for unsecured loans and
>>> accept the accompanying risks. Or they should make the loans secured and
>>> charge lower interest rates commensurate with the lower risk. They
>>> should not be allowed to have it both ways.
>>
>>They will presumably charge a lower rate once the loan becomes secured.
>>The higher rate is still justified before this step is taken.
>
> I'm not sure why you presume that. They have no such obligation.
I'm not sure why you think that.
Secured lending represents a lower risk than unsecured lending, and
it is therefore the norm for secured interest rates to be lower than
unsecured interest rates.
Where a creditor asks the court to grant an order to turn a hitherto
unsecured debt into a secured debt, I would have thought the court
would require the creditor to apply future interest at a rate more
appropriate to secured lending.
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