Bank Loan - Refusal

S

summer28

Guest
I applied for a bank loan of 28k from BOI to buy a new car and to basically pay off a credit card (3000k) and an existing loan (3900k), I just wanted one loan payment, repayments over 5 years were quoted at approx €566 a month, I earn 28k a year and I was refused. I have missed a few payments on both the loan and my cc over the past few months but have always paid them within 4/6 weeks, how long after you miss a payment do you go on the 'bad' credits rating list? Refusal was due to these missed payments the bank said and that they wouldn't entertain any smaller loan until my current account started looking healthier. Any advice on any other financial instution that will offer me a loan - GE Woodchester perhaps? I can well afford the payments, I just let myself run into a few difficulties over the summer. Any advice on what to do? I don't owe anything else and have quite healthy savings with BOI.

 
How "healthy" are your savings? Could you not use some of this to pay off your credit card/ existing loan? Then get a smaller loan if you need
 
no i dont want to touch these savings, they are for a deposit on a house. The bank said they wouldnt give me a smaller loan.
 
summer28 said:
I don't owe anything else and have quite healthy savings with BOI.
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You could start by using those to clear first the credit card debt and then - 'health' permitting - the other loan. There's no point having savings earning 1% or 2% (?) and debts attracting interest at +10% (?) on a term loan and probably 25-30% on a credit card balance. Then ask BoI to add a note to your credit rating to reflect this, and then cast around for a €28k loan.

None of my business, maybe, but do you really need to spend >€20k on a new car, while you still have outstanding debts...?
 
summer28 said:
no i dont want to touch these savings, they are for a deposit on a house. The bank said they wouldnt give me a smaller loan.
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Well, it's up to you. But you're losing money. And if BoI 'won't'(?) give you a smaller loan, plenty of others will, once you sort out your credit rating...
 
Will anyone give me a loan at the moment then for €17200 approx for the car and i can just continue to pay off the loan and the cc? And i really do need a car for travelling workwise.
 
I was speaking to a girl in PTSB regarding going into the bad credit rating for late payments on mortgage and she said that being late a few days was ok. As was missing a months but miss the 2nd month and Id be getting reported for that!

Not sure if its the same for personal loans although id assume its similar!
 
Thanks for that, i have had 2/3 letters from the bank and cc company telling me i was late paying. Do they tell you when you are going to be listed as a bad credit rating thru a letter or is it automatically when you miss a payment ?
 
Point being - can anyone recommend anywhere else to go for a loan when you have been turned down by one of the big banks, namely BOI
 
No, they don't tell you as such. I think being over a month late will do it, 'though (open to correction). Look, more debt is probably only a 'phone call away - as per the TV ads. Even a car dealer will probably give you a finance package. But it'll cost you dearly, and even more dearly until you straighten out the credit rating problem ('preferential/discretionary' interest rates, etc.)

I can accept that you need a motor for work purposes, but would a €7,200 car not do you as well as a €17,200 one...?:confused:

P.S. The reason BoI won't give you the advice I gave you above is because they make more money out of you that way. It's their job, remember?
 
DrMoriarty said:
I can accept that you need a motor for work purposes, but would a €7,200 car not do you as well as a €17,200 one...?:confused:

P.S. The reason BoI won't give you the advice I gave you above is because they make more money out of you that way. It's their job, remember?
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Listen to DrM - He speaks wise words.
 
summer28 said:
how long after you miss a payment do you go on the 'bad' credits rating list?
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Missed payments reported by the lender to the remain on your record for five years.
Point being - can anyone recommend anywhere else to go for a loan when you have been turned down by one of the big banks, namely BOI
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Have you tried other mainstream lenders before resorting to those that offer loans to those with bad credit ratings at a premium rate?

Of course, a more fundamental question is do you really need to borrow this amount and will you take steps not to get into further debt or miss payments thereafter?
 
summer28 said:
I applied for a bank loan of 28k from BOI to buy a new car and to basically pay off a credit card (3000k) and an existing loan (3900k), I just wanted one loan payment, repayments over 5 years were quoted at approx €566 a month, I earn 28k a year and I was refused. I have missed a few payments on both the loan and my cc over the past few months but have always paid them within 4/6 weeks, how long after you miss a payment do you go on the 'bad' credits rating list? Refusal was due to these missed payments the bank said and that they wouldn't entertain any smaller loan until my current account started looking healthier. Any advice on any other financial instution that will offer me a loan - GE Woodchester perhaps? I can well afford the payments, I just let myself run into a few difficulties over the summer. Any advice on what to do? I don't owe anything else and have quite healthy savings with BOI.
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if you are think of a morgage make sure you don't miss any more payments...

the guy in PTSB said one missed payment in 5 years would be enough to put a stop on 100% morgage... less strict on the 92% but still...

if you couldn't pay the smaller loans , how will you pay this big car loan ?

also if its secured on the car they will never give you more than the cost of the car...
 
If you look at it from the bank's point of view, you are looking to borrow a whole salary multiple and you have already had difficulty keeping up payments in the past. I know that you said that you 'got into difficulties' but what is to say that this won't happen again? Your salary is not that high compared to what you are looking to borrow. If you are looking to buy a house in the future, how on earth will you be able to afford the mortgage? Plus, you are thorwing your money away if you have both savings and credit card debts. Better to clear the cards and put a standing order on the first of the month to tranfer a set amout to a deposit account with a long notice period, which makes it harder to get at the cash. Then put the interest you are saving on the repayments in the deposit fund also.

The bank's refusal is probably a blessing in disguise. Throw all extra money at your debt, and either defer the car of look for a much cheaper secondhand one - the place is awash with them. New cars depreciate horribly anyway.

Please don't dig yourself into a financial hole.

cheers,
Diziet
 
the guy in PTSB said one missed payment in 5 years would be enough to put a stop on 100% morgage... less strict on the 92% but still...
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I cant see the bank trying to repossess the house after one missed payment!
 
Yes but on the other hand don't take what a salesperson with a vested interest in selling you something as independent, professional advice. If necessary ask for such comments to be put in writing and you'll probably find that they are not prepared to do that and the loan will simply be goverened by the standard loan agreement terms & conditions.
 
Savvy said:
I cant see the bank trying to repossess the house after one missed payment!
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sorry , to clarify , one missed payment on another loan will stop the mortgage been approved....
 
sorry , to clarify , one missed payment on another loan will stop the mortgage been approved....
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Ahhhh,that certainly makes sense,riskier for the bank.
 
Can i just clarify one thing - a couple of missed payments which have always been cleared within the next month is going to stop me getting credit in the future - on a personal loan, mortgage application etc ... i am talking a max missed payment of €250.??
 
Can i just clarify one thing - a couple of missed payments which have always been cleared within the next month is going to stop me getting credit in the future - on a personal loan, mortgage application etc ... i am talking a max missed payment of €250.??
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It's possible to be refused credit even if you've never missed a payment. Banks will sometimes refuse credit and refuse to give any reason. As is their right.

If a bank decides that it only wants people with a spotless credit history and with no other loans then you could easily find yourself being refused by them. But if you are basically in good shape you should be able to find someone else who's happy to take your business.

I had a situation a couple of years ago where I wanted to move a loan from one lender to another because there was a better interest rate.
I had no payments missed on the loan up to that point so it should have been a no brainer for the new lender. But for some reason they refused it and wouldn't give a reason.

I got my ICB report and couldn't find any problems on it. The only reason I can think for it is that I'm self employed. I eventually moved the loan to another lender with no problem.

The most important thing to remember when looking for a loan is don't get too greatful for receiving one. You are being sold a product. You wouldn't be greatful to Superquinn for allowing you to buy bread. You certainly wouldn't be so greatful that you'd pay extra or buy insurance just in case they changed their mind.

The banks will quite often give you the impression that the loan is a favour to you and that you should take out payment protection because otherwise they might change their mind. Don't fall for this.

The other gotcha is the adverised interest rate being different to the rate you actually get. One Direct are particularly bad for this. It's perfectly legitimate to charge people a higher rate if they area higher risk. But if you apply based on an ad claiming an APR of 8% make sure that you aren't really being charged 10% or 12% and the sales person just forgot to mention it.

-Rd
 
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