Reluctance by bank to give us loan

H

Havana

Registered User
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We applied for a small loan of €2000 from our bank, NIB.

I rang today to see was there any word and the lady we had been dealing with read out the response that came back from whoever makes these decisions.

Basically they are 'reluctant' to give us the loan as we have more than the amount applied for in our saving accounts and they do not see why we need it! There was also some mention of our 'disposable' income each month being such that we do not require the loan. (about 1.5/2 times the loan required). We require more than €2000 and the surplus is coming from our wages next month.

When applying we informed her that the money in the savings is earmarked for something else.

We applied for the loan over two years so the first 2/3 months would have low enough repayments, but plan to pay it all off over the next 4/5 months.

Why does it matter so much to them? They seem fairly clear that we can make the repayments each month (only €170 between the 2 of us). I could totally understand if they thought we could not afford it!

Any ideas? Thanks
 
"We applied for the loan over two years so the first 2/3 months would have low enough repayments, but plan to pay it all off over the next 4/5 months."

That there is probably the reason. The bank make little enough off a €2k loan as it is. There is a fairly fixed overhead to setting up a loan in their books. If they think it will be paid off within 5 months, why bother?

The bank would probably (happily) give you an overdraft for the same €2000, because this tends to be more profitable for them. But it is still more of a nuisance than a profit centre.
 
In my own experience its quite difficult to get a loan from any bank for any amount less than about 3k. They tend to push smaller borrowings like this onto credit cards and overdrafts, which net a greater profit.

You'd be better off in borrowing this from a credit union or trying the above, especially if its going to be repaid early anyway.
 
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