# Declined for €10k car loan & don't understand..



## Mag2006 (1 Jun 2007)

Hi all,

In a terrible pickle at the moment and furious at my own bank AIB. I applied for €10k car loan over 5 years which is only €204 per month and they turned me down. Reason being that my salary comes in and goes out too quickly or something like that. Well I nearly died, we just bought a house (our 1st) so we have had alot of expenditure over the past 6 weeks but we have never gone into the red, we earn good money and the account is always in the black, basically we are never broke. Also, I had a €5k loan with them last year which I actually paid off early, it was over 2 years and I never missed a payment, and before a year was up I had paid it off.

GE Money have now also declined me and I don't get it. I know my credit rating is clear and I now use my married name and have my new address so what's going on here??.

My application is like this, can someone tell me what to do as I need to change my car and I have sold it to someone else as I was sure I would get a €10k loan!!.

I did a single application, in my married name, home owner, nett take home pay €2,700 per month, have 2 kids, mortgage is €1,600 but our household Income €5,300 per month after tax so I just don't understand why I have been turned down, especially by my own bank who gave me a loan and credit card when I was a tenant and on less income.

Help, I really have to get a loan of €10k, going mad thought it would be done and dusted very fast.


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## !RAY (1 Jun 2007)

Hi
I applied to AIB for a 30,000 car loan. There was no problem with a hire purchase loan but they declined me for the normal 30,000 loan. I have been banking with AIB for 8 years and have 2 mortgages with them. This really pissed me off. I went to permanent TAB they too said no problem with the hire purchase and the other loan would have to go to the manager to be approved. Answer came back no problem and I don’t even bank with them I must add that I have 25,000 in shares that I was willing to put up to secure the loan with both banks. Because they are shares they could not be used to secure the loan. The PTSB was in swords and the girls name was Donna. Hope this is of some help.
!RAY


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## Erasure (1 Jun 2007)

I think they typically look at your bank account for the last 3 months. Could it be that due to moving into a new house you have had a bit more expenditure than normal?  Could you try applying in joint names with your husband?

Another option (if you have savings there) is credit union but if you have no savings then it would be too long before you could save enough to get loan from them.

I feel your pain - this happened to me about 3 years ago and the only thing i could think of at the time was some excess expenditure in the previous weeks.  

Shop around and try a few banks you might be lucky.


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## Mag2006 (1 Jun 2007)

Thanks for that Ray, I am so annoyed with AIB. I would consider us excellent customers. I was furious with the manager saying I was declined coz my salary comes in and then goes out to frquently, like who's doesn't we all have mortgages, bill, have to eat etc and it's never like we are down to our last €100 in a month, so so mad at them. I live in Wicklow so might apply online to TSB and see what happens...


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## Lauren (1 Jun 2007)

Move your account. I would...disgusting...


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## Mag2006 (1 Jun 2007)

I would move everything only for it would be like starting all over again really. We have all bills, mortgages on direct debit, have AIB Visa cards and most banks you have to wait 6 months before you get a laser card and I can't live without mine, use it for everything as I don't have the time to get to an ATM when I need to.

I acknowlegde that alot of money was coming out of our account for all house things but we have saved €10k for all that so nothing was not paid and we never went over our limit. It's disgraceful and the way I was spoken to by the manager was nasty. I have sold my current car privately and the buyer wants to collect next week and I have the new car held for me and I just cannot believe I can't get a loan of €10k which I can more than afford!.


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## peno (1 Jun 2007)

Mag2006 said:


> most banks you have to wait 6 months before you get a laser card and I can't live without mine, use it for everything as I don't have the time to get to an ATM when I need to.



Is this true?

I assumed that you were given a laser card straight away on opening a current account.

Are Halifax not offering this in the form of their debit card which you receive on opening the account?

ANd as far as I know with the switcher options now your DD are automatically transferred to your new account.


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## Mag2006 (1 Jun 2007)

I am with AIB for years and the only reason I think this is because recently a friend of mine opened an account with BOI and was told she has to have her account for 6 months before a laser card is issued. She earns €50k per annum and has her own house and in the same employment for over 5 years, so I was shocked!.
I haven't looked into changing but I am going to do that today, apparantly NIB are supposed to be very good now so will check them out.


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## bacchus (1 Jun 2007)

Mag2006 said:


> most banks you have to wait 6 months before you get a laser card and I can't live without mine


 
true when you open your first account...not true afaik when you transfer your account from one bank to another and have previous statements..


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## bacchus (1 Jun 2007)

Going back to your issue...

Mortgage = 1600 Income = 3500
That's 46% of disposable salary for mortgage repayment, way above the recommended limit of 25%..
I would think this is why you are getting refused..

Have you tried  http://www.tesco.ie loans?


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## pinkyBear (1 Jun 2007)

Hi there bacchus 
Mortgage =1600 Income 5300 = 30% and recomended limit is 40% of income...


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## shanegl (1 Jun 2007)

Does the fact that you did not do a joint application affect the percentage?


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## bacchus (1 Jun 2007)

pinkyBear said:


> Hi there bacchus
> Mortgage =1600 Income 5300 = 30% and recomended limit is 40% of income...


 
oups, got my figures all wrong then.

I had a closer look at the limits and indeed banks seem to set it up between 30% and 40%.


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## NHG (1 Jun 2007)

Can you not get car finance from the garage where your new car is held - they are usually pushing it upon you


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## Mag2006 (1 Jun 2007)

shanegl said:


> Does the fact that you did not do a joint application affect the percentage?


 
I was wondering about this one, does anything think I should go back to them and ask them to put the application through in joint names. We have a number of accounts with them (1) joint current account (2) AIB Visa cards x 2 (3) I still have a current account there in my maiden name that is just used for the childrens allowence and early childcare payment (4) An online savings account which is our rainy day account and we pay €120 per month into that and it's just there for back up.
Still upset that I was declined and just baffled!!


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## Mag2006 (1 Jun 2007)

NHG said:


> Can you not get car finance from the garage where your new car is held - they are usually pushing it upon you


 
I got €15k approved with another garage last week when I was buying another car but I changed my mind on that particular car and have went for one in a different garage. Told the new dealer I was arranging my own finance as I was sure I would be fine!!. Half afraid to go down that road with new dealer incase I am declined through him and he sells the car to someone else!


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## dk99 (1 Jun 2007)

Mag2006 said:


> I got €15k approved with another garage last week when I was buying another car but I changed my mind on that particular car and have went for one in a different garage. Told the new dealer I was arranging my own finance as I was sure I would be fine!!. Half afraid to go down that road with new dealer incase I am declined through him and he sells the car to someone else!



Bear in mind when arranging finance with garage you will pay over the odds. The garage makes their commission by selling over the normal base rates of the banks. Most garages use what was woodchester, now GE.


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## Thrifty1 (1 Jun 2007)

"Bear in mind when arranging finance with garage you will pay over the odds. The garage makes their commission by selling over the normal base rates of the banks. Most garages use what was woodchester, now GE." dk99

Not always the case, you are being quoted €204 a month for €10,000 thats an APR of 8.26 % a garage will give you this rate.

Go back to garage say you would like to apply for finance through them as you dont have time to be going into you own bank to do it, say you did get an online quote for €204 a month and ask can they match this - they should.
The garage will try a few bank, probably, GE, PTSB,BOI,AIB so chances are you will get accepted by one.

dk99 garages get lower base rates for putting business the banks way so usually the rate you get with the garage will be similar to what the bank offer. OP being quoted 8.26% id be very surprised if garage didnt match that.


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## Mag2006 (1 Jun 2007)

The rate with the garage wasn't that bad at all plus the gas thing is I was approved for €5k more than I want now!!!. JAYSUS!!.
I can't go back to that dealer if I am not buying the car off them, they were cross enough when I told them I didn't want it in the first place!!


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## HAPPYGIRL (2 Jun 2007)

Would the fact that you were approved for 15k the week before applying for 10k have affected the latter application? Might look like you were looking for 2 loans?


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## Raskolnikov (2 Jun 2007)

AIB gave me a Laser card as a student when I open my account and I didn't even have a job.


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## mo3art (3 Jun 2007)

I had a similar problem a few years ago when we bought our first house.  We knew we could afford the loan to pay for a newer car but the bank didn't see that we could and kept on reciting affordability problems when we asked for a loan.  So I had to prove them wrong.
I did up a pack, detailing our weekly/monthly expenses and gave them my logbook of spending for the previous year and they then approved the loan on the spot at a reduced interest rate.
Have you tried the credit union though?  My local one are offering 6.99% on car loans which is a really good rate and they tend to take their time over applications I have found.


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## conor_mc (3 Jun 2007)

bacchus said:


> oups, got my figures all wrong then.
> 
> I had a closer look at the limits and indeed banks seem to set it up between 30% and 40%.


 
With two dependents, would the banks not lean towards the lower end of this range?

Also, what type of mortgage do you have - fixed, or tracker/variable. I think this may be significant in that banks might be pricing a couple of rate rises in on top of the 1600 a month you already pay.

You never mentioned whether your husband had an existing car-loan either.

As I calculate it, you'd be liable for half the mortgage (€800) plus a €200 car loan, on income of €2700 a month - that brings loan repayments up to 37% of your take-home pay, which is borderline.


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## Mag2006 (5 Jun 2007)

The only loan we have is the mortgage (which is 3 year fixed with IIB), we own both our current cars outright and never had car finance. We have a loan with the credit union for hubbies car and some more money we borrowed for doing the house up but our credit union is not on the ICB and we pay them cash every week so in that sence we are okay.

I haven't contacted AIB again as I am still furious, but a joint income of €5,300 per month, €1600 on our mortgage and €1535 on childcare leaves us with €2165 disposable and our household bills are not that much so it's really annoying me. I really don't know where to turn now as I am afraid to apply to another crowd incase I am declined again and it's down on my credit record.


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## bacchus (5 Jun 2007)

Mag2006 said:


> The *only loan we have is the mortgage* (which is 3 year fixed with IIB), we *own both our current cars outright* and never had car finance. *We have a loan* with the credit union *for hubbies car* and *some more money we borrowed* for doing the house up


 
humm...the above does not add up....


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## Mag2006 (5 Jun 2007)

How is that??. I own my car outright, never owed a penny on it,(my bonus payment paid for the balance due when I originally bought it) hubbies car we only needed to borrow €7k off the credit union towards it in Feb and borrowed an extra €5k for the house. So, when you take income less mortgage less childcare it does add up and we are not mad spenders. We pay a cash amount to the credit union every Sat so we are well covered.


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## Mag2006 (5 Jun 2007)

Panic over, got full approval from Tesco ten mins ago!!. Yippie and they are cheaper!!. Yippie and bye bye AIB!!


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## bacchus (5 Jun 2007)

It does not add up.... in the context of the quote.


> _The *only loan we have is the mortgage* (which is 3 year fixed with IIB), we *own both our current cars outright* and never had car finance. *We have a loan* with the credit union *for hubbies car* and *some more money we borrowed* for doing the house up_




_I make it at least 2 loans (one mortgage + one CU loan), and only one car is owned outright because of loan on the second..._

_So one can now only rightly ask if there is not other "unclaimed things" that would explain why you are getting refused for a very small loan with a good family income. It is somehow very strange IMO._


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## Mag2006 (5 Jun 2007)

Nothing unclaimed Baccaus, the credit union loan is not secured on hubbies car so as far as our credit rating goes the only thing on it is our mortgage. I am very organised as regards finance, even have an accounts book that everything is recorded in and check everything. We have always ensured that we don't over borrow.


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## sammya (27 Jan 2011)

*Car loan declined*

Applied for a car loan last week thru a car dealer & it was declined. The loan was for 13k. My monthly income is 4k & my only major outgoing will be my mortgage payment of 1k/month. I asked for a reason why it was declined, the dealer told me that the banks normally dont tell the reason. Am I entitled for a reason from the bank? How can I get the reson from the bank?


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## johnnygman (27 Jan 2011)

VW bank are very good and quick approval, rates are excellent, any of the VW, Skoda, Seat dealers offer finance through VW bank and the rates are as low as 4.9% in some cases.
All online approval based on credit score so no hassle with paperwork etc..
I bought a car through them and it was done and arranged in 24 hours.


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## moneyhoney (31 Jan 2011)

johnnygman said:


> VW bank are very good and quick approval, rates are excellent, any of the VW, Skoda, Seat dealers offer finance through VW bank and the rates are as low as 4.9% in some cases.
> All online approval based on credit score so no hassle with paperwork etc..
> I bought a car through them and it was done and arranged in 24 hours.



Isn't VW Bank Hire Purchase though, rather than a loan?

[broken link removed]


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## hippy1975 (5 Feb 2011)

moneyhoney, I was wondering that too, are all garage-arranged finance HP rather than loan??  They seem to me to be.  I would have always preferred avoiding HP but these days it seems easier dealing with the garages than the banks, is HP generally good value ?  My main concern was always that you don't have the same flexibility to pay off lump sums etc as you could get with a personal loan


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