AA Personal Loan

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I discovered the AA Personal Loan service completely by chance. I was hunting for a loan on moneysupermarket.com and noticed an advert for AA Loans which stated that their typical rate was 5.8%, I didn't think I had a hope in hell of getting a loan like that as I'd already been refused finance by both of the banks I hold current accounts with (Abbey and Lloyds TSB). But with that in mind, I just thought, why not?!

The application ...
...of insurance offered by the AA called Gap Cover. This is offered to those using the loan for a car or bike. If there was to be an accident and the car you had bought was written off, the insurer may only pay out half of the loan amount, this cover would cover the rest of the loan. In affect if your car is written off before the loan is repaid the loan is also written off. This is a one off payment of £199, but I thought that this was worthwhile as ... more

Since I passed my driving test I've been driving around in a Volvo 340. By itself that doesn't sound too bad now does it? But what if I also mention that said Volvo 340 is twenty-one years of age, still not so bad? Well, I'm only nineteen years of age; hope that puts things into perspective for you. And, as if that wasn't bad enough since I've been driving said car the fan belt, the water pump, the spark plugs, all the tyres and the battery have been replaced, out of pure necessity. So, I wanted to get a new car, from the day after I passed my test. As, with most people I cannot afford to go out and buy a brand spanking new car, but what I can afford to do is to get a loan and buy a much newer car.

I discovered the AA Personal Loan service completely by chance. I was hunting for a loan on moneysupermarket.com and noticed an advert for AA Loans which stated that their typical rate was 5.8%, I didn't think I had a hope in hell of getting a loan like that as I'd already been refused finance by both of the banks I hold current accounts with (Abbey and Lloyds TSB). But with that in mind, I just thought, why not?!

The application I completed online was pretty standard. You give your personal details, employment status and income, all the usual questions. One of the questions I quite liked was Additional Income? This will obviously not apply to many people, but as well as my day job I do some paid work for my parents on our farm, this obviously increased my total income and gave me a better credit rating. I never released that having credit cards, etc. made you more eligible for a loan as it shows you have a credit history and are used to dealing with repayments, etc. I have two and so I was again pleased. The application also asks for what you require the money, there are many categories on a drop down list, and the first is Car/Bike. After I had completed the application, I expected an answer in minutes as the advert had publicised, I was just given a telephone number to call.

I was reluctant to call, as I was sure they would just say, "Sorry we are unable to offer you a loan at this time". However, my boyfriend persuaded me to call and I wasn't disappointed.

When I called all the operators were busy and my reluctance seemed justified. But I was not waiting much more than fifteen seconds before I was talking to a real person. She took a few details to verify my identity, address, telephone number, and date of birth. She had to read me some terms and conditions, which were surprisingly concise. I was also told that by making the phone call the status o my loan had changed, to advised, but there was still no obligation to accept it. There were a few more questions about whether I would need any insurance, etc. I said no, I already have a very comprehensive policy. One question which really surprised me was "how much money do you spend on leisure and hobbies each month?", I had no idea about that. I made a rough estimate. She asked how much was outstanding on each of my credit cards and what the limit was on each, by this time I was expecting "NO", but instead she said I could increase the loan to cover them. I couldn't believe it but I refused as the amount I had requested meant comfortable payments without having to stretch myself.

During the phone call I was also offered a special type of insurance offered by the AA called Gap Cover. This is offered to those using the loan for a car or bike. If there was to be an accident and the car you had bought was written off, the insurer may only pay out half of the loan amount, this cover would cover the rest of the loan. In affect if your car is written off before the loan is repaid the loan is also written off. This is a one off payment of £199, but I thought that this was worthwhile as a young driver.

I was also amazed to learn that I would get a payment holiday at the beginning of my repayments, which meant I wouldn't have to make a repayment for three months but my gap cover payment would be taken the month before my first payment. This affectively gave me a two month payment break, still it was nice to have.

She confirmed the terms and conditions of my loan and asked if I would like my agreement to be sent express delivery, this is an additional £45, I refused.

My agreement was delivered within the two days I expected. I made my application and phone call on Saturday and my agreement arrived on Tuesday. I quickly signed the agreement and sent it back in the post that day. I was told on the phone that I would receive the money within three working days of the signed agreement being received by the AA.

On Thursday I received a call at work. This was rather unexpected and I felt very nervous. But there was no need, the gentlemen again asked me to confirm my identity by giving my address, postcode and date of birth. He then informed me that my money would be in my account by the following Tuesday or Wednesday. I was ecstatic.

The money was in place on the Tuesday and the following weekend I went and bought my car. A nice Kia Rio (see the DIAMOND review), a few years old but not twenty one, not even a quarter of that.

Hope to have helped

©Expired-Account

To give you some statistics which may help you in deciding whether or not to apply.
· I earn £950 a month, gross
· I had only been employed with the company seven months at the time of application
· I had £200 a month additional income
· I borrowed £5,000 over 3 years
· My monthly repayments are £162.63
· I will pay £851(ish) interest over the term
· My rate is 9.85%
· I pay my wages into Lloyds and the best rate they would offer me was £18.9%
· I pay £500 into Abbey each month, they refused my application altogether

UPDATE 28/09/2007

I applied for my loan last September, thus I had expected my Gap Cover Payment to come out in November, however it didn't. I was a bit confused, I had my fingers crossed that the AA had forgotten all about me and my repayments. Sadly, they hadn't. In December my first repayment was taken out of my bank account, not on the agreed date but a few days before I got paid. This would have been fine but the AA also decided to take my Gap Cover payment at the same time, more than doubling my payment. Unsurprisingly, especially as it was Christmas, I did not have enough money in my account, luckily Lloyds TSB made the payment and when my wages went in I was no longer overdrawn.

The AA continued to take their normal payments for a few months, however in May 2007, after moving in with my boyfriend, I had run up huge debts on my credit cards, so I decided to ask the AA for more money. The easiest way to contact the AA Loan Service is simply to phone them, I had to give the operator my current agreement number and all the generic security questions. To begin with all I wanted to do was see if I could increase the size of my loan. They instantly agreed to give, no I shouldn't say give, I mean 'lend' me an additional £5,000. However increasing the size of my loan increased my interest rate as I had not made many payments on my original loan. The rate I was now offered was 11.4%, I decided to pay this off over three and a half years, as this meant my repayments were £279.46, however I also have their insurance for an additional £40 a month. I didn't really want this insurance, but by the time I realised I had it, it was too late to cancel and to be honest if anything did happen to me I wouldn't want my boyfriend to have to pay it off.

I spoke to my boyfriend and we agreed that increasing my loan was far better than paying off credit cards. I called back to confirm the quote they had given me. Again I was sent the agreement to sign and then I quickly received the money. When I did called I asked that the direct debit be taken out on the first day of each month as I get paid on the last day of each month. However they take the money out on the day of the month on which I agreed the loan, as this also happened with my original loan, I don't think the AA care when they take their money as long as they get it. I must say that their customer service is brilliant, they are always very friendly and helpful. Every time I phone the AA I am quickly connected to a customer services operator.

Another piece of helpful advice, I don't know if this applies to all loans but certainly with the AA, I was told this by an adviser. Instead of increasing your monthly payments, if you ever have the option of doing this, put the excess money into a high interest savings account and then when you think you have nearly enough to pay off your loan give your loan company a call. This was any interest that would apply will be refunded and you will not pay your insurance charges if you have taken this option. However, if you make higher repayments you will pay the full amount of interest and insurance for the originally agreed loan term.

To find out more visit
www.theaa.com/loans

I would recommend the AA Personal Loans to anyone.

What more can I say?!

Hope to have helped

©Expired-Account

To give you some statistics which may help you in deciding whether or not to apply.
· I earn £1050 a month, gross
· I had only been employed with the company approx eighteen months at the time of application
· I had £200 a month additional income
· I borrowed £9,473 over 3 ½ years
· My monthly repayments are £329.46
· My rate is 11.4%

Since applying for this loan and being rejected by Lloyds TSB I now regularly receive letters from Lloyds informing me that they are willing to loan me £3,000 over 5 years, with repayments around £90.00 a month. This really annoys me because I would much prefer to have my loan with a company I actually bank with. Nevermind, they missed out on my business! 

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