Tesco Personal Finance Loans

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Tesco Personal Finance is a relatively new company, offering a range of financial services from loans, to credit cards, and all manners of insurance. I worked in the loans division, taking potential customers through loan applications, answering questions, and also dealing with existing customers, whether it be changing their payment dates or paying off the remainder of their loan.

First off, I have to say ...
...can be picked up at Tesco supermarkets, filled in and sent off. All types of application are processed by the same people, so by sending the form you are prolonging the process. Also, a lot of the time, forms will have not been filled in correctly by the customer. You may well think "well I can fill in a form!", however, you'd be surprised. It's very easy to put in what you think they are asking you, when in fact, they need a different ... more

Why the other side? Well, I used to work for this here company as a Personal Finance Advisor (that's one of those jumped up titles which isn't quite as good as it sounds). So, I have an insiders view of how it works and how well it works too.

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Tesco Personal Finance is a relatively new company, offering a range of financial services from loans, to credit cards, and all manners of insurance. I worked in the loans division, taking potential customers through loan applications, answering questions, and also dealing with existing customers, whether it be changing their payment dates or paying off the remainder of their loan.

First off, I have to say that the staff are very well trained. We spent two weeks in full time training, which may not sound a lot, but when you remember that TPF only offer one kind of loan, that's really quite comprehensive. The higher levels of management are also very experienced - my team leader had been working within the Royal Bank of Scotland for 9 years (Tesco personal Finance is a Royal Bank company).

*So what do they offer?*

TPF only offer one kind of loan, and its at a fixed rate, so no matter how much interest rates fluctuate, you will always know exactly what you need to pay. The APR on TPF loans is really quite competitive, and while they may not be the very lowest in the market, they are looking to offer the very best service. A table of current expected loan repayments can be found at :

http://www.tesco.com/finance/loans/repayments.htm

If you do see one of these tables and then contact TPF for a loan, be aware that the APR may have changed since those figures were published, and also that the APR is sometimes calculated depending on the customers personal circumstances. If you are in any doubt, you can phone TPF and ask the expected repayments before making any application.

Payment protection is optional on any loan taken out, and although it does cost more, I would really advise people to get it. It is truly heartbreaking having to take calls from people who thought they would never need it and now find themselves in a position where they are unable to pay the loan. I'm sure there are many people who will never need it, but I personally always stick to my philosophy of 'better safe than sorry'. The protection cover you against illness, death, and losing your job, and any advisor will be happy to give you further details on how each circumstance is specifically covered.

*How much can I borrow?*

The minimum amount you can borrow is £2000, with the maximum being £25,000. Loans can be taken out for any purpose, be it buying a new car, adding a conservatory, going away on holiday or consolidating all your debts (overdrafts, credit cards etc), although loans over £15,000 do have some restrictions.

*Who can apply?*

This is a hard question to answer, as there is a long list of basic requirements, and lots of exclusions to that list too. But I can give you a basic idea. You will need some kind of income, and you should be working over 16 hours a week. People living off pensions may apply, self-employed people will need to have been in their business for a minimum of 2 or 3 years. Students, unemployed etc are not eligible for a loan. You must also be over 18 (yes, I have had 16 year olds who wanted loans). If you are in any doubt, phone up, giving your personal circumstances, and they'll be able to tell you :)

*How do I apply?*

There are three ways to apply for a loan - over the phone, over the internet, or a postal application.

* Postal Application. - Forms can be picked up at Tesco supermarkets, filled in and sent off. All types of application are processed by the same people, so by sending the form you are prolonging the process. Also, a lot of the time, forms will have not been filled in correctly by the customer. You may well think "well I can fill in a form!", however, you'd be surprised. It's very easy to put in what you think they are asking you, when in fact, they need a different figure etc. Postal applications are more likely to be declined in my experience, so I really wouldn't recommend this option.

* Internet Application - The form can be found at the Tesco site, and can be filled in online and submitted over a secure connection, or printed off and sent in. Forms that are submitted are printed off within the actual call centres periodically, and are processed as soon as possible. Again, you may fill the form in wrongly (not knowing that you've answered it wrongly of course), and therefore are more likely to be declined for a loan. The flipside however, is that they are currently offering even lower rates when you apply online, so its up to you whether you are prepared to take that risk.

* Phone applications - This is the way I'd recommend applying, and not just because I worked on the phones either :) From having processed the postal and internet applications, I know that its a lot easier to get the correct information from the customer by asking the right questions, and you can't get that with a form. A phone application should take approximately 10 to 15 minutes in total, and you can also ask any questions on the loans while you are there.

*What do they need to know in my application?*

I suggest that before you start any application, you grab that big pile of financial information you stuffed away in a drawer :) TPF need to know three main things - personal information, employment information, and financial information.

Personal information covers who you are, where you live (and also where you last lived in certain circumstances), age, status, etc. If you are applying jointly with another person, they will need all these details for the second applicant also.

Employment Information covers who you work for, and their address (employers may be contacted in some cases for verification of details), how often you are paid, your job title etc

Financial Information covers all your income and all your outgoings (excluding utility bills). Make sure you have bank statements, credit card statements, pay slips, any other loan statements etc. Don't just guess or estimate, as although you may get past the first hurdle of the loan, you could be tripped up later when your details are checked.

*What happens next?*

After going through the application process, you will either be declined or given a provisional agreement to a loan. I will touch on declined applications in a moment, however a provisional agreement is by no means certain. This *does not* mean you will definitely get the loan. After you've been given an agreement in principle, a form is sent out to you which you must sign. You will also usually be asked to send in some documents to be checked - this may be your bank statements, your last 3 months worth of pay slips, your credit card statements etc. Self-employed people will usually have to send in their last two years of accounts. Once TPF receive those documents, they are checked within 48 hours (excluding weekends), and only then will you be approved for the loan.

You may think that it is a bit of a hassle and time consuming to have all this document sending going on, but I say this - if they are checking like this, it means that they are less likely to take on people who will not pay loans back, and therefore are more likely to continue to offer loans at low rates.

All documents will be sent to you by first class post, and should be with you within 48 hours, however TPF relies on the royal mail, and we all know how efficient they can be *note the sarcasm oozing from every word?? :)*

If you are approved, funds go straight into your designated bank account within 3 working days. A letter will be sent out to you to confirm your successful application, although you may receive the money before you receive that (can you tell I really don't like the royal mail??).

*WHY oh why was I declined!?*

If you filled in an application over the internet or by post, then it may just be because you didn't fill in the forms correctly. If not, then it could be for any number of reasons. All applications are put into the computer at which point your details are credit checked and then all your information is measured against TPF's own personal criteria. If you are declined, it does not necessarily mean that you have been blacklisted, or that you have dodgy credit either. TPF has its own criteria for customers, and it may just be that all your information doesn't meet that criteria. This doesn't mean that you will be refused elsewhere. Also, the advisors on the phone *do not* have details of why you were turned down, nor could they give them to you even if they did know. They aren't given that information because, if those details were given out, there are many unscrupulous characters in this world that would take advantage of that knowledge for illegal purposes.

A note about credit checking :

There is no such thing as blacklisting. A credit reference agency does not decide who has good and bad credit, it merely stores your financial information. It is the lenders such as loans and credit card companies who interpret those facts and decide whether you meet their criteria. However, if you truly are baffled as to how you were turned down, then what you need to do is get your file from the credit reference agency to check that all the information on it is correct. You can do this by sending a £2 cheque to Equifax, the credit reference agency. Any information that is incorrect can be appealed against to have it taken off your record.

If your circumstances change after you have been declined, then you can re-apply after three months

* After you have your loan...*

You can change your monthly payment dates, although don't expect it to be done instantly. The company needs a valid reason why you want to change your payment dates, and also needs time to implement them. The advisors on the phone do not make this decision, they will merely take your request and pass it on, so you'll have to wait a short time for a decision.

If you wish to pay all of your loan off at some point, then there is no charge. However - because the loans are front loaded (which means that most of the interest is paid off at the start of the loan and the further through the loan you get, the more capital you are actually paying off), means that if you wish to pay it off very early, then you may have to pay off a little more so that the company can recover the costs of lending to you in the first place, as permitted by the consumer credit act. Usually though, you'll receive some kind of discount for settling your loan early :)

*In summary*

Tesco Personal Finance is a well run company, with well trained and helpful staff, and offers good rates. They do take a little more time over processing applications than some companies, however this is in the consumers interest. They aren't perfect, they do make mistakes, I'm not going to pretend they don't (I have after all, been on the receiving end of complaints), however overall they do strive to provide a good service. Its certainly worth checking them out :)

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Sorry for the length and detail of the op, but given my experience, the more prepared and informed you are when making an application, the more smooth and quick it will be. You'll also make an advisors day! ;)
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TPF website : http://www.tesco.com/finance

Equifax - obtaining a copy of your credit file : http://www.equifax.co.uk/equifax/consumer/getfile.html
 

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