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Can't get a bank loan

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  • 14-02-2012 2:43pm
    #1
    Dr. Kenneth Noisewater
    Registered Users Posts: 3,236 ✭✭✭


    Folks

    I'm getting worried. In the past 2 1/2 years I've applied for 3 bank loans, all of which have been refused. The first one was in 2009 when I applied for just €1,000 from my own bank which was refused (!). This bank is where my wages go and at the time I would have been earning around €420 a week net.

    I'm currently earning around €510 per week and have seen 2 loan applications, both at my own bank and one other bank, refused in the past 6 months. Both for €10,000.

    I had a loan a couple of years ago - before I applied for the €1,000 loan - that had arrears on it as I was in financial difficulty at the time and as a result I can't get a loan now.

    I'm single, have a full-time job with a decent wage (i'm a public servant so I have a decent amount of job security aswell), no loans, no mortgage, no dependents, and therefore, a fair amount of disposable income.

    What I'm asking is, is there any way out of this? I'm caught in a vicious circle here, I can't get a loan because I have a bad credit rating, and I can't improve the credit rating unless I get a loan.

    The €10,000 I was looking for was to move up a few years car wise. I'll live without it. My main concern is, in 3 or 4 years if I'm looking for a mortgage, deposit saved or not, will I be up sh*t creek?


Comments

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    #2
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Ok firstly just something i noted on that.
    I'm caught in a vicious circle here, I can't get a loan because I have a bad credit rating, and I can't improve the credit rating unless I get a loan.

    This isnt really a vicious circle. Your credit rating is effected due to previous history. Hard to improve your credit record as you have shown yourself to be a lending risk as you have previously defaulted on a loan.

    Ok so the previous loan which was defaulted on, was this cleared up with the lender? Was it cleared in the end?

    €10k is not a small amount for a personal loan to be honest. Especially these days. Would you consider going for a finance agreement. I would recommend a personal loan usually but the security of a finance agreement for the bank may reduce the risk for the bank.

    Any bad marks on your credit history are wiped after 5/6 following clearance of the credit borrowed.


  • Options
    #3
    Dr. Kenneth Noisewater
    Registered Users Posts: 3,236 ✭✭✭Dr. Kenneth Noisewater


    Thanks for your reply.

    Yep, the previous loan was paid in full. Whats the story with a finance agreement, what are the differences?

    To be honest I'd go for any sort of agreement (as long as the interest wasn't extortionate) as I'd like to get the loan to prove that I can pay it back so as I can improve my credit rating.

    €10,000 I agree is not a small amount per se, but I could definately afford the repayments.


  • Options
    #4
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    deccurley wrote: »
    Thanks for your reply.

    Yep, the previous loan was paid in full. Whats the story with a finance agreement, what are the differences?

    To be honest I'd go for any sort of agreement (as long as the interest wasn't extortionate) as I'd like to get the loan to prove that I can pay it back so as I can improve my credit rating.

    €10,000 I agree is not a small amount per se, but I could definately afford the repayments.

    Well a finance agreement such as a Hire Purchase agreement is a secured agreement. Basically if you dont keep up the payments the bank can repossess the vehicle. See link below for full info.

    http://www.citizensinformation.ie/en/money_and_tax/personal_finance/loans_and_credit/hire_purchase.html

    All the banks would over this but most times application done at the dealer. You go in to dealer and pick the car and they put through the application to whichever bank they use for finance packages.

    Your ability to repay at present time is part of it so you may be able to afford payments on €10k but the banks must assess the risk of future defaults. Your previous default will not help on this. They also must stress test your ability to repay to account for possible wage reductions which may come, unexpected expenses which may come up, etc.


  • Options
    #5
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    deccurley wrote: »
    Folks

    I'm getting worried. In the past 2 1/2 years I've applied for 3 bank loans, all of which have been refused. The first one was in 2009 when I applied for just €1,000 from my own bank which was refused (!). This bank is where my wages go and at the time I would have been earning around €420 a week net.

    I'm currently earning around €510 per week and have seen 2 loan applications, both at my own bank and one other bank, refused in the past 6 months. Both for €10,000.

    I had a loan a couple of years ago - before I applied for the €1,000 loan - that had arrears on it as I was in financial difficulty at the time and as a result I can't get a loan now.

    I'm single, have a full-time job with a decent wage (i'm a public servant so I have a decent amount of job security aswell), no loans, no mortgage, no dependents, and therefore, a fair amount of disposable income.

    What I'm asking is, is there any way out of this? I'm caught in a vicious circle here, I can't get a loan because I have a bad credit rating, and I can't improve the credit rating unless I get a loan.

    The €10,000 I was looking for was to move up a few years car wise. I'll live without it. My main concern is, in 3 or 4 years if I'm looking for a mortgage, deposit saved or not, will I be up sh*t creek?

    Obviously the loan that was in arrears is appearing on your Credit Bureau Check and this is the reason you are being declined now. Was that old loan eventually paid off or written off? The record will appear on your Credit Check for 5 years from when it has been completed and will continue to cause you an issue for this length of time. You can purchase a copy of your credit report on ICB.ie for about €5 or €6. This should give you an idea of when your rating will have been repaired


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    #6
    Jet Black
    Registered Users Posts: 3,841 ✭✭✭Jet Black


    No mention of savings in your post, you say you have a fair amount of disposable income but where is it going?

    Assuming you've been in employment since 2009 so say 3 years you could have easily be savings @ €200 per month, that would be 7200.

    You can have all the disposable income in the world, if your spending it all you won't be able to get any form of credit.

    Stop applying for loans and start saving. Don't apply again until your saving for at least six months as it won't look good on you credit report.


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