# Personal Loan (for car) refused?



## smiley (26 Jan 2012)

I applied for a loan for my car (same as i did in the past) for 20+ K.

They refused the cash and want me to take out a HP agreement instead. My credit history is A1 etc.

Has anybody else been sent down this road by their bank.

Im assuming that they make A LOT more money out of the HP agreement....be it that they will be the ones buying the new car and getting the approx 10 percent cash discount...rather than me?


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## Guns N Roses (27 Jan 2012)

The reason the Bank are pushing the Hp agreement is in the event you can't make the repayments they can repossess your car. If they give you a personal loan and you use it to buy a car they cannot touch it. Just reapply for a personal loan (to a different bank if necessary) and don't tell them it's for a car.


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## Bronte (27 Jan 2012)

If the interest rate on the HP is ok and you're sure you will make the repayments why is going down this route any worse than a bank loan.  

Are you sure about your credit rating, can you afford a new car?


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## smiley (27 Jan 2012)

Bronte said:


> If the interest rate on the HP is ok and you're sure you will make the repayments why is going down this route any worse than a bank loan.
> 
> Are you sure about your credit rating, can you afford a new car?



Because i can get at least a 10% discount by buying with cash. From what i can make out i wouldnt get this with a hp agreement.


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## 44brendan (27 Jan 2012)

This does'nt make sense. The retailer is getting paid the same irrespective of how the deal is being financed!! The only difference may be where you are availing of the finance directly from the retailer  Eg. Fiat Finance etc.


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## demoivre (27 Jan 2012)

Bronte said:


> If the interest rate on the HP is ok and you're sure you will make the repayments why is going down this route any worse than a bank loan.



HP agreements are less flexible than variable rate term loans and you will get a better deal with cash in hand . Also OP will own the car from day one if he goes the term loan route.
OP I would say it's a matter of the bank having some security with the HP agreement in that they would own the car until it's paid for - try elsewhere imo.


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## 44brendan (27 Jan 2012)

If you find a Bbank that's prepared to lend a new client 20K+ unsecured let us know.


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## smiley (27 Jan 2012)

44brendan said:


> If you find a Bbank that's prepared to lend a new client 20K+ unsecured let us know.



I am not a new client. I am banking with them for 20 years. My mortgage is small (69k), have a very secure job and really no shortage of money. Credit history is pristine.

Any loans i had in the past i paid them off early and quickly.

I think its just another example of how banjaxed the banks are.


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## 44brendan (27 Jan 2012)

Not disagreeing with you on track record. Unfortunately the horse has bolted and the Banks are only now locking the stable door. Your're also right in your assessing the Banks as being banjaxed. My comment relates to the difficulty now of obtaining unsecured facilities. I.e. If your own bank won't support you, it is unlikley that you will have sucess elsewhere! 
BTM I empathise fully with your frustration on the decision.


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## pator (27 Jan 2012)

smiley said:


> Because i can get at least a 10% discount by buying with cash. From what i can make out i wouldnt get this with a hp agreement.


 
This seems strange. 
Surely you do the deal with the garage and agree the price of the car. Step one completed. 

Step two = how would you like to finance the car? 

(i) Alot of the major brands are doing finance in the 5% to 7% range (yes it is a hp agreement) which is more compeditive than bank car/personal loans so that might be an option 
or 
(ii) you bring you own finance which is either cash or loan (the garage doesn't know or care) If its a bank loan and the bank want you to go the HP route you simply tell them this is the car and they set it up. Just means the loan is tied to a particular asset (car) which effectively is security for the bank in the event of default. 

Long way of saying that how you choose to finance an item is seperate from stricking a deal price for the item.* 


*(of course some garages may even offer a better deal if you take the finance off them because then they are selling the car and also selling money so make a profit from the fiinance side of the deal as well and this gives them wiggle room)





smiley said:


> I am not a new client. I am banking with them for 20 years. My mortgage is small (69k), have a very secure job and really no shortage of money. Credit history is pristine.
> 
> Any loans i had in the past i paid them off early and quickly.
> 
> I think its just another example of how banjaxed the banks are.


 
Have you asked them why they refused a personal loan to what sounds like an excellent customer? 
You say no shortage of money so the only thing I can think of is that they feel a €20k+ unsecured loan is too much for your income level.


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## Guns N Roses (27 Jan 2012)

I applied to Bank of Ireland in 2010 for a personel loan of 20k for new car. They told me that they don't give out personel loans for cars and offered me a Hire Purchase Car Loan instead. I didn't want to enter into a HP agreement and turned down the offer. I waited a few weeks, then reapplied on BOI website for a personel loan of 20k (did not mention the word "car") and was approved no problem. I was able to haggle for a good cash deal and now have a great car that the bank cannot reposess.


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## smiley (27 Jan 2012)

Guns N Roses said:


> I applied to Bank of Ireland in 2010 for a personel loan of 20k for new car. They told me that they don't give out personel loans for cars and offered me a Hire Purchase Car Loan instead. I didn't want to enter into a HP agreement and turned down the offer. I waited a few weeks, then reapplied on BOI website for a personel loan of 20k (did not mention the word "car") and was approved no problem. I was able to haggle for a good cash deal and now have a great car that the bank cannot reposess.



This sounds like a good idea. I may try this i think. It sounds like you got the very same treatment.


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## amtc (29 Jan 2012)

My last car payment is on 1 Feb - 20k repaid in full - baking with them for 20 years.

Went speculatively look for a loan and was told I had great credit rating (salary should come in at 90k this year. but only offered HP - BOI.


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## RichInSpirit (29 Jan 2012)

*Lenders Afraid*

The Banks etc. are just afraid to give out more unsecured money after the last decade. 
A hire purchase agreement on a car or vehicle is the ultimate in security.  The car can be repossessed nearly up to the last payment. 
Hire purchase is safer lending even than mortgage lending. 

P.s. I've heard of a vehicle being burned out before repossession.


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## Guns N Roses (29 Jan 2012)

amtc said:


> My last car payment is on 1 Feb - 20k repaid in full - baking with them for 20 years.
> 
> Went speculatively look for a loan and was told I had great credit rating (salary should come in at 90k this year. but only offered HP - BOI.


 
Sounds familar. I reckon that BOI staff are told to push the HP option first.


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## Bronte (30 Jan 2012)

Guns N Roses said:


> . I waited a few weeks, then reapplied on BOI website for a personel loan of 20k and was approved no problem. .


 
When did you do this, what did you say the loan was for?  I thought the days of getting a large loan on the press of a button were over?


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## flossie (30 Jan 2012)

I applied for a car loan from AIB last year, around February time having just relocated back to Ireland (although some activity had remained in my current account while overseas). I was lookig for €24k over 5 years on variable rate (so I could overpay and shorten the term) on a salary of €55k plus car allowance of €11k (total income €66k).

I was initially refused, wouldn't give me details. I called the bank up (AIB), informed them that I needed a reliable car for work. If i didn't have the car I couldn't travel to clients, therefore I couldn't do my job, therefore I would lose my job and AIB would end up losing my business and making any money from me. I was quite forceful, and demanded they go back to their underwriters with my point. I got a call a few hours later to say they had reviewed and decided to offer me the loan. 

Moral of the story - keep at them, don't accept their initial refusal. Obviously, look at your circumstances etc. and don't go overboard.


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## smiley (18 Mar 2012)

Just an update on this. 

I reapproached Bank of Ireland in mid March. They declined to offer a personal loan for a car. I have a good safe job with a decent salary and travel etc. I have an equity portfolio worth a low 6 figure sum and a small mortgage.

They are not offering personal loans to anybody to buy a car! Hp means they own the car. we have all heard stories of people abandoning their cars at airports etc.

I got hp on the car and got a much lower interest rate anyway versus the personal loan.

And they say they are lending to SME's. It seems to be April fools day every day of the week.


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