In message <0rbgu35mbnm20jn4tcm9gbq36a4dont8uf@4ax.com>, John Anderton
writes
>On Mon, 24 Mar 2008 12:03:40 GMT, Mike_B
>wrote:
>
>>Nobody said it was, but IMO if a bank lends money based on the
>>expectation that in case of default it be repaid by sale of the property
>>then they should be making them secured loans, not
>
>Why is it up to the bank ? If the customer, for whatever reason, wants
>an unsecured rather than a secured loan, why should the bank refuse ?
>There are some valid reasons for wanting an unsecured rather than
>secured loan.
>
>> pretending they are unsecured
>
>The bank is *not* pretending any such thing. The loans *are*
>unsecured, if they weren't the bank wouldn't have to go to court as
>described in the original post.
>
>>in order to be able to charge a higher interest rate.
>
>An unsecured loan represents a greater risk to the bank and therefore
>attracts a higher rate because :
>
>a) It will cost more to reclaim the debt by gaining access to the
>customer's assets than for a secured loan
In what way will it cost more? The few quid application costs for a
court judgement and charging order versus the secured loan application
costs for a possession order are not all that different.
>b) There will always be some customers who have no assets when they
>default and so the bank won't get any money back, which won't happen
>with a secured loan.
>
We aren't talking about people with no assets, as their property
wouldn't be at risk anyway.
>It is *not* because the bank cannot get anything back from every
>customer who defaults on the loan
>
>Cheers,
>
>John
--
Mike_B |