# Personal loan denied, overdraft to blame?



## suripitamela (11 Aug 2014)

Hi, 

I would like some opinions here. 

I have a 500 Euro Overdraft in my AIB account, which I pay in full every month with my salary (around 3000)......I tend to use part of the overdraft monthly but I keep covering it. Have not had any unpaid DD from my account since February this year. 

Now, I have tried to get a personal loan but was denied. The only reason I see is that they are looking at the overdraft in my account, thing is that I have that for many years now.. I am also a permanent employee with more than 9 years in the same place.

I requested a Credit report and seems to be clean, only shows an entry when I requested a loan this year, and one I requested in July last year... 


Am I missing something, or is it infact that the 500 euro overdraft is affecting my credit and thats why I am being denied a loan? (personal loan I am looking is around 5K) 

Thanks,


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## Steven Barrett (11 Aug 2014)

It probably is. Overdrafts are a loan and lenders will look at the highest amount owed in the last 6 months. They are also looking for people who are living within their own means at present. If you are using your overdraft facility every month, they will wonder how you will manage with extra loan repayments. 

Get rid of the OD (they're expensive anyway), give it 6 months and apply again. 


Steven
www.bluewaterfp.ie


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## suripitamela (11 Aug 2014)

Thanks Steven


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## Gerry Canning (11 Aug 2014)

suripitamela.

Probably is as Steven says.
Lenders are looking hard at (ability to repay) 
So if you dip into overdraft every month you are showing you do not have repayment capacity to take on debt.
Also (as Steven);
 If you manage to kill off the overdraft in 3 months you have in money terms repaid circa 150 each month.
That means you have then shown  the ability to repay a 5,000 loan over 36 months.

Also it is good to kill off the overdraft , even if no loan is forthcoming.


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## suripitamela (11 Aug 2014)

Thanks Gerry, 

Bad on my side as I've never thought it would affect my rating, just called the bank to cancel it and it turns out that I have to go to the banch in person as they don't do it over the phone. Funny how they give it to you easily over the phone but they won't cancel it 

I guess going there is the next step


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## Fella (11 Aug 2014)

Banks are really sly with there behaviour, friend of mine had a problem with a credit card debt got himself stuck in a rut just paying off minimum and massive interest every month , he had increased his limit to book tickets for a stag party group booking , they increased his limit over the phone , I agreed to help him out and pay his debt off for him on condition he would decrease his limit from 5k down to 500, he rang the bank with me present and they refused to decrease his limit without him putting it in writing and posting it to them , it's terrible behaviour imo they are just making it as difficult as possible even though this guy had a problem with his credit card.


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## vandriver (11 Aug 2014)

*Have not had any unpaid DD from my account since February this year.*
Does this mean that you had unpaid DDs in Jan,Feb this year ?
Or,as you are not clear,do you mean that you had no DDs before Feb and have never missed one?
Of course,if its the first,there's your answer.


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## suripitamela (11 Aug 2014)

B]Does this mean that you had unpaid DDs in Jan,Feb this year ?

Yes, I had a DD that my bank returned unpaid early in February

Of course,if its the first,there's your answer.[/QUOTE]

Thanks, how long does it take to become "clear" so it doesn't affect me? 

I will go ahead and cancell the overfraft anyways.


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## vandriver (11 Aug 2014)

3k a month is a good wage,why are DDs being returned?


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## suripitamela (12 Aug 2014)

it was a one off, not that it happened many times


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## Gerry Canning (12 Aug 2014)

suripitamela said:


> B]Does this mean that you had unpaid DDs in Jan,Feb this year ?
> 
> Yes, I had a DD that my bank returned unpaid early in February
> 
> Of course,if its the first,there's your answer.


 
Thanks, how long does it take to become "clear" so it doesn't affect me? 

I will go ahead and cancell the overfraft anyways.[/QUOTE]
............

ICB issues stay on system for circa 5 years.

If you down load from Irish Credit Bureau website their form , you can for E6.50 get a copy of your ICB.You will then know the story.

From what you say one missed DD may not even show up.

I would keep the overdraft in place , as it may be needed, just ENSURE you stay well within it.


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