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Can we renegotiate our bank loans as we're on social welfare?

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  • 04-09-2010 7:30pm
    #1
    marti8
    Closed Accounts Posts: 909 ✭✭✭


    Just to give a very quick overview, back in March 2008 we (tecnically I) took out a loan for €10,000 from my bank (one of the big Irish banks) Then a few months later I applied for and got a smaller loan of €2,000. Then a few months later I applied for an was approved for another loan of €3,000. However, we thought long and hard about the last loan and decided not to take it as we didn't want to overstretch ourselves.

    The thing is, all along from when I got the first loan to the last loan (which I didn't in the end take) we were on a social welfare payment, and the bank knew this. We never lied or mislead or anything like that. Yet they still gave us those loans even though the only income was social welfare. For over the last 2 years we have been repaying roughly €60 a week without fail (even when social welfare was reduced) but now things are getting tighter and we're thinking of approaching the bank and saying basically "sorry, the repayments will have to be reduced to €30 per week". Will they accept this? If not the alternative is that I stop any direct debits etc, inform social welfare to stop paying money into my account etc, in essence close my account and walk away. Don't want to do that but if they said they wouldn't reduce the repayments I'd have no choice. What would be the consequences of having to do that?

    By the way, isn't it bloody amazing that they'd in the first place approve loans totalling €15,000 for someone who's only income is social welfare?!!!!! Also my wife doesn't have an income either, my wife is a mature student and a dependant on my social welfare claim. I guess the term "reckless lending" springs to mind. Thanks.


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    #2
    Sigi
    Closed Accounts Posts: 134 ✭✭Sigi


    By the way, isn't it bloody amazing that they'd in the first place approve loans totalling €15,000 for someone who's only income is social welfare?!!!!! I guess the term "reckless lending" springs to mind.

    As does the term "reckless borrowing".


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    #3
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    Sigi wrote: »
    As does the term "reckless borrowing".

    As does the term reckless lending. Had they not lent it, we couldn't borrow it. The bank should have seen that we, I , were in no position to repay that loan at the agreed repayment rate as my only income was social welfare. I am not saying I cannot repay it, I can and I will, provided the bank agree to a renegotiation of the loan repayments.


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    #4
    Mr. Presentable
    Closed Accounts Posts: 9,496 ✭✭✭Mr. Presentable


    Your circumstances have not changed, why should the bank's terms?

    And, yes, you also have a responsibility to only borrow what you can repay. It's unlikely the bank gave you the loans without your agreement.


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    #5
    smokin ace
    Registered Users Posts: 855 ✭✭✭smokin ace


    the only way to find out is go into the bank and ask them but to be honest its your own fault your in this situation you knew you were on social welfare at the time and did not think of the future when getting the loans and thats why a lot of people are the way they are now by getting so much money off the bank and not thinking of the future
    just remember a few year ago the banks would give a loan to a monkey in dublin zoo(not calling you a monkey)
    BUT ITS YOUR FAULT SO YOU MAY DEAL WITH IT


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    #6
    [Deleted User]
    Posts: 23,339 ✭✭✭✭ [Deleted User]


    You borrowed €12,000 while on the scratch ?
    What was the loan used for ?


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    #7
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    RoverJames wrote: »
    You borrowed €12,000 while on the scratch ?
    What was the loan used for ?

    We used it for normal things - holidays, moving house etc etc.


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    #8
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    As said the bank will probably not allow any reduction. You have had no change in your financial income and thus why should they be taking the fall. You must have showed the bank your ability to repay the loan and they gave the loan on the basis of this.

    also i would not go in with the attitude "sorry, the repayments will have to be reduced to €30 per week". this will not get you very far. I would be overly nice and polite if you are looking to reduce payments without any change to your income.

    Easy to blame banks but responsible borrowing also brought a lot of troubles.


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    #9
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    marti8 wrote: »
    We used it for normal things - holidays, moving house etc etc.

    you are joking yeah?


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    #10
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    Mr. Presentable wrote: »
    Your circumstances have not changed, why should the bank's terms?

    And, yes, you also have a responsibility to only borrow what you can repay. It's unlikely the bank gave you the loans without your agreement.

    And the bank has no responsibility seems to be what you are suggesting? As I said: had they not lent it, I couldn't borrow it.

    And yes, as I also said I can repay it but not at the agreed repayment amounts. Rather than €60 pw I can repay €30 pw. If that is not good enough for them so be it, let them reposses the car we don't have, let them reposses the house that we don't own..........

    I am not defaulting, I am going to renegotiate. It's then upto them to decide what to do. After all if I was guilty in taking the money they were equally guilty, if not moreso, in lending the money.


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    #11
    Denisejcc
    Registered Users Posts: 1,060 ✭✭✭Denisejcc


    marti8 wrote: »
    Just to give a very quick overview, back in March 2008 we (tecnically I) took out a loan for €10,000 from my bank (one of the big Irish banks) Then a few months later I applied for and got a smaller loan of €2,000. Then a few months later I applied for an was approved for another loan of €3,000. However, we thought long and hard about the last loan and decided not to take it as we didn't want to overstretch ourselves.

    The thing is, all along from when I got the first loan to the last loan (which I didn't in the end take) we were on a social welfare payment, and the bank knew this. We never lied or mislead or anything like that. Yet they still gave us those loans even though the only income was social welfare. For over the last 2 years we have been repaying roughly €60 a week without fail (even when social welfare was reduced) but now things are getting tighter and we're thinking of approaching the bank and saying basically "sorry, the repayments will have to be reduced to €30 per week". Will they accept this? If not the alternative is that I stop any direct debits etc, inform social welfare to stop paying money into my account etc, in essence close my account and walk away. Don't want to do that but if they said they wouldn't reduce the repayments I'd have no choice. What would be the consequences of having to do that?

    By the way, isn't it bloody amazing that they'd in the first place approve loans totalling €15,000 for someone who's only income is social welfare?!!!!! Also my wife doesn't have an income either, my wife is a mature student and a dependant on my social welfare claim. I guess the term "reckless lending" springs to mind. Thanks.


    without getting into the 'reckless lending' debate I would advise you to contact the bank and go in for a meeting to restructure the loan. They may give you reduced repayments for a particular term or they may extend the term to reduce repayments (obviously the cost of credit will increase so you will pay more over the longer term). This will give you some breathing space in the short term. Hope this helps.


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    #12
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    chris85 wrote: »
    As said the bank will probably not allow any reduction. You have had no change in your financial income and thus why should they be taking the fall. You must have showed the bank your ability to repay the loan and they gave the loan on the basis of this.

    also i would not go in with the attitude "sorry, the repayments will have to be reduced to €30 per week". this will not get you very far. I would be overly nice and polite if you are looking to reduce payments without any change to your income.

    Easy to blame banks but responsible borrowing also brought a lot of troubles.

    But when they gave me the initial loan they knew I was on social welfare. In fact, later I was told proper procedure hadn't been followed when those loans were given to me and had proper procedure been followed they would never have given me those loans.


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    #13
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    marti8 wrote: »
    But when they gave me the initial loan they knew I was on social welfare. In fact, later I was told proper procedure hadn't been followed when those loans were given to me and had proper procedure been followed they would never have given me those loans.

    ok but you got the money also so will give blame to both of you. In fairness i find it hard to believe the bank told you they didnt follow proper procedure.

    Best outcome you will get may be half payments for six months.

    Whats changed that you cant meet the payments now and you were for the last two years?


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    #14
    WIZE
    Closed Accounts Posts: 3,597 ✭✭✭WIZE


    OP Why would think the Bank would reduce the Loan repayments

    I suppose you could ask

    You said you would pay the money back with €60 a week

    You are not a man of your word and not very trust worthy

    I think it was kind of the Bank to look at your Situation and give you a Loan

    Think about it

    What happens in the future when an Emergency happens and you need a loan
    by screwing the bank they will screw you in the future

    Think about it


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    #15
    smokin ace
    Registered Users Posts: 855 ✭✭✭smokin ace


    i know you dont like what i am saying but its your fault that your in this mess not the banks go into the bank and talk to them and see what they say and dont go in with the attitude that this is the banks fault explain your situation and if they wont help you go to the money advise and budgeting services(MABS)they are very very helpfull and wont turn you away
    an internet forum is not the place to be getting financial advise


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    #16
    Tails142
    Registered Users Posts: 2,105 ✭✭✭Tails142


    marti8 wrote: »
    And the bank has no responsibility seems to be what you are suggesting? As I said: had they not lent it, I couldn't borrow it.

    And yes, as I also said I can repay it but not at the agreed repayment amounts. Rather than €60 pw I can repay €30 pw. If that is not good enough for them so be it, let them reposses the car we don't have, let them reposses the house that we don't own..........

    I am not defaulting, I am going to renegotiate. It's then upto them to decide what to do. After all if I was guilty in taking the money they were equally guilty, if not moreso, in lending the money.

    Marti - you ever see those ads on UK TV channels? They for short term money lending where you can get a lend of £60 for a week. If you read the small print on the ads the interest rate is something like 5400% APR.

    In my opinion a person would be an idiot to use these services, especially at such a high rate.

    However by your reasoning, you would be an idiot NOT to use it cause you're being offered the money? :confused: Do you see where you're going wrong...

    Also, I'm laughing out load at you using the loans for going on holidays, you must've been wrecked after all that hard work on the scratcher... getting out of bed early and not getting home till late etc, I'm sure you deserved it :p


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    #17
    eimearcmh
    Closed Accounts Posts: 599 ✭✭✭eimearcmh


    marti8 wrote: »
    Just to give a very quick overview, back in March 2008 we (tecnically I) took out a loan for €10,000 from my bank (one of the big Irish banks) Then a few months later I applied for and got a smaller loan of €2,000. Then a few months later I applied for an was approved for another loan of €3,000. However, we thought long and hard about the last loan and decided not to take it as we didn't want to overstretch ourselves.

    The thing is, all along from when I got the first loan to the last loan (which I didn't in the end take) we were on a social welfare payment, and the bank knew this. We never lied or mislead or anything like that. Yet they still gave us those loans even though the only income was social welfare. For over the last 2 years we have been repaying roughly €60 a week without fail (even when social welfare was reduced) but now things are getting tighter and we're thinking of approaching the bank and saying basically "sorry, the repayments will have to be reduced to €30 per week". Will they accept this? If not the alternative is that I stop any direct debits etc, inform social welfare to stop paying money into my account etc, in essence close my account and walk away. Don't want to do that but if they said they wouldn't reduce the repayments I'd have no choice. What would be the consequences of having to do that?

    By the way, isn't it bloody amazing that they'd in the first place approve loans totalling €15,000 for someone who's only income is social welfare?!!!!! Also my wife doesn't have an income either, my wife is a mature student and a dependant on my social welfare claim. I guess the term "reckless lending" springs to mind. Thanks.

    I would go into the bank as soon as possible. You said your social welfare was reduced. Was this before or after you got the 2nd loan?
    marti8 wrote: »
    As does the term reckless lending. Had they not lent it, we couldn't borrow it. The bank should have seen that we, I , were in no position to repay that loan at the agreed repayment rate as my only income was social welfare. I am not saying I cannot repay it, I can and I will, provided the bank agree to a renegotiation of the loan repayments.

    If you were in no position to repay the loan at the agreed repayment why did you sign the credit agreement and take the money?


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    #18
    WIZE
    Closed Accounts Posts: 3,597 ✭✭✭WIZE


    eimearcmh wrote: »
    I would go into the bank as soon as possible. You said your social welfare was reduced. Was this before or after you got the 2nd loan?

    I think everyones was as part of the budget


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    #19
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    Mr. Presentable wrote: »
    Your circumstances have not changed, why should the bank's terms?

    And, yes, you also have a responsibility to only borrow what you can repay. It's unlikely the bank gave you the loans without your agreement.

    My circumstances have changed, my social welfare payment was reuced several months ago - as was everyones else - by about €20 per week. And my "rent allowance" was reduced by about €15 per week or thereabouts. That's a weekly reduction of over €30 pw. From what I know that was the first time in the history of the State that social welfare payments were ever actually reduced as opposed to simply not increasing etc.

    The bank should not even have given me those loans as they later told me. It seems that while there was money on my account and money going into my account weekly that the person who authorised the loan didn't actually check where that money was coming from - had they checked they would have seen it was social welfare and would not have approved the loans (this is what the bank told me) Again, I am not looking to default - as I probably could do rather I'm simply going to look to renegotiate the loan down from a repayment of €60 per week to €30 per week - at the end of the day the bank still get their money, yes, over a longer time frame but they still get their money.


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    #20
    limericklassy
    Closed Accounts Posts: 65 ✭✭limericklassy


    When I had my student account, they phoned me up twice to ask me if i wanted a loan up to 70,000. I said no to the two..gas..wonder now why they are fcuked eh!


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    #21
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    eimearcmh wrote: »
    I would go into the bank as soon as possible. You said your social welfare was reduced. Was this before or after you got the 2nd loan?



    If you were in no position to repay the loan at the agreed repayment why did you sign the credit agreement and take the money?

    Yes, social welfare was reduced after the second loan.

    What I actually meant to say was that had social welfare not reduced I could repay that agreed amount however it did reduce (something nobody could have foreseen at that time and the first time it had ever happened in the history of the State) I can still repay the loan rather than wringing my hands and walking away from it but at €30 pw and not €60. They can take it or they can leave it. If they leave it I'll close my account and walk away. Don't want to sound brash or arrogant or whatever but that is just the reality. I am thankful to the bank for the loans of course, that is the very reason why I don't wish to simply default.


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    #22
    JustAddWater
    Closed Accounts Posts: 1,990 ✭✭✭JustAddWater


    How are you still on the dole for 2 years? Don't mean to be rude but if you're €15k in debt you should be trying harder than anyone else out there

    Not speaking for anyone else but I lost my job twice in the past 2 years,once I was out for 4 months. There ARE jobs out there if you look hard enough and want one

    Sorry to be harsh, but you can't blame the banks all the time just because it's easy. I too had loans and went to MABS but I took responsibility and sorted things out

    It's likely the banks will tell you to get lost and only MABS might help you get your debt down. I know things are hard but i'm sorry I find it hard you've been on the dole 2 years and haven't gotten anywhere. Don't blame the banks, they didn't put a gun to your head and tell you to take the money and you're the one who asked so you've got some blame to bear for the mess you're in too.

    Thankfully you saw sense in rejecting the last loan! Hope you get sorted soon tho and learn from all of this.

    If I'm grateful for one thing about the recession its that it's thought me the value of money and hopefully a few others will learn that too!



    marti8 wrote: »
    My circumstances have changed, my social welfare payment was reduced several months ago - as was everyones else - by about €20 per week. And my "rent allowance" was reduced by about €15 per week or thereabouts. That's a weekly reduction of over €30 pw. From what I know that was the first time in the history of the State that social welfare payments were ever actually reduced as opposed to simply not increasing etc.

    The bank should not even have given me those loans as they later told me. It seems that while there was money on my account and money going into my account weekly that the person who authorised the loan didn't actually check where that money was coming from - had they checked they would have seen it was social welfare and would not have approved the loans (this is what the bank told me) Again, I am not looking to default - as I probably could do rather I'm simply going to look to renegotiate the loan down from a repayment of €60 per week to €30 per week - at the end of the day the bank still get their money, yes, over a longer time frame but they still get their money.


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    #23
    eimearcmh
    Closed Accounts Posts: 599 ✭✭✭eimearcmh


    marti8 wrote: »
    Yes, social welfare was reduced after the second loan.

    What I actually meant to say was that had social welfare not reduced I could repay that agreed amount however it did reduce (something nobody could have foreseen at that time and the first time it had ever happened in the history of the State) I can still repay the loan rather than wringing my hands and walking away from at €30 pw and not €60. They can take it or they can leave it. If they leave it I'll close my account and walk away. Don't want to sound brash or arrogant or whatever but that is just the reality. I am thankful to the bank for the loans of course, that is the very reason why I don't wish to simply default.

    I agree with JustAddWater about going to see MABS.

    It would be up to the bank what your rescheduled repayments would be. I would make an appointment to see someone about your loan + repayments. In the meantime i would try and get written proof that you're income has reduced since the loans were approved.

    Try and keep up with your repayments as best you can and be glad its €12,000 not €120,000.


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    #24
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    JustAddWater wrote: »
    How are you still on the dole for 2 years? Don't mean to be rude but if you're €15k in debt you should be trying harder than anyone else out there

    Not speaking for anyone else but I lost my job twice in the past 2 years,once I was out for 4 months. There ARE jobs out there if you look hard enough and want one

    Sorry to be harsh, but you can't blame the banks all the time just because it's easy. I too had loans and went to MABS but I took responsibility and sorted things out

    It's likely the banks will tell you to get lost and only MABS might help you get your debt down. I know things are hard but i'm sorry I find it hard you've been on the dole 2 years and haven't gotten anywhere. Don't blame the banks, they didn't put a gun to your head and tell you to take the money and you're the one who asked so you've got some blame to bear for the mess you're in too.

    Thankfully you saw sense in rejecting the last loan! Hope you get sorted soon tho and learn from all of this.

    If I'm grateful for one thing about the recession its that it's thought me the value of money and hopefully a few others will learn that too!

    I'm not on the dole, I get disability allowance, a social welfare payment. And no, I'm not one of those who is happy to kick back and stay on social welfare for life - that's why I'm heading back to uni here in Ireland for a degree later this month as I want to better myself longer term. So all going well I'll have a degree in a few years time. Maybe, "maybe" that'll help with securing a career - but maybe not. Time will tell.

    Sorry but when a bank doesn't follow its own rules then yes, you can most certainly blame the bank. They should not have given me those loans in the first place and they said this themselves. I am not negating my own responsibility that is why I am seeking to renegotiate and not default. If the bank say get lost (as you suggest they may) then fine, I will, but so too will my bank account.


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    #25
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    eimearcmh wrote: »
    I agree with JustAddWater about going to see MABS.

    It would be up to the bank what your rescheduled repayments would be. I would make an appointment to see someone about your loan + repayments. In the meantime i would try and get written proof that you're income has reduced since the loans were approved.

    Try and keep up with your repayments as best you can and be glad its €12,000 not €120,000.

    We have paid off half of the €10,000 loan already and 25% of the €2,000 loan. So, we owe about €6,500 now. Hopefully the bank will renegotiate and accept €30 pw instead of €60 pw. If they don't the only option open will be to close my account and walk away from it. And that's not something I want to do.


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    #26
    Mr. Presentable
    Closed Accounts Posts: 9,496 ✭✭✭Mr. Presentable


    marti8 wrote: »
    The bank should not even have given me those loans as they later told me. It seems that while there was money on my account and money going into my account weekly that the person who authorised the loan didn't actually check where that money was coming from - had they checked they would have seen it was social welfare and would not have approved the loans .
    marti8 wrote: »
    we were on a social welfare payment, and the bank knew this..

    So, which is it? You just come across as dishonest tbh, and I for one hope they nail you to the wall.


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    #27
    Mr. Presentable
    Closed Accounts Posts: 9,496 ✭✭✭Mr. Presentable


    marti8 wrote: »
    My circumstances have changed, my social welfare payment was reuced several months ago - as was everyones else - by about €20 per week. And my "rent allowance" was reduced by about €15 per week or thereabouts. That's a weekly reduction of over €30 pw. From what I know that was the first time in the history of the State that social welfare payments were ever actually reduced as opposed to simply not increasing etc.

    The bank should not even have given me those loans as they later told me. It seems that while there was money on my account and money going into my account weekly that the person who authorised the loan didn't actually check where that money was coming from - had they checked they would have seen it was social welfare and would not have approved the loans (this is what the bank told me) Again, I am not looking to default - as I probably could do rather I'm simply going to look to renegotiate the loan down from a repayment of €60 per week to €30 per week - at the end of the day the bank still get their money, yes, over a longer time frame but they still get their money.

    And according to your posts on other threads your rent was reduced to match your income.

    To refresh your memory http://www.boards.ie/vbulletin/showpost.php?p=60846514&postcount=4


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    #28
    eimearcmh
    Closed Accounts Posts: 599 ✭✭✭eimearcmh


    marti8 wrote: »
    We have paid off half of the €10,000 loan already and 25% of the €2,000 loan. So, we owe about €6,500 now. Hopefully the bank will renegotiate and accept €30 pw instead of €60 pw. If they don't the only option open will be to close my account and walk away from it. And that's not something I want to do.

    €6,500 is definitely more manageable.

    Theres no need for you to stop repayments. It could get messy in the future if you do. The ICB will have a record of your loans and if you miss payments. This would impact future loan applications, whether in another bank or the Credit Union.


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    #29
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,905 Admin ✭✭✭✭✭Toots


    OP, when you applied for the loans, on your application what did you list as your occupation?


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    #30
    marti8
    Closed Accounts Posts: 909 ✭✭✭marti8


    Toots* wrote: »
    OP, when you applied for the loans, on your application what did you list as your occupation?

    I applied online and if that question was asked, can't recall whether it had been or not but I guess it must have been, than I would have put either not working/in reciept of social welfare/NA etc. I never said I was working because I was not.


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    #31
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,905 Admin ✭✭✭✭✭Toots


    Do you mind me asking which of the banks these loans are held with?


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