Appealing a Credit Union Loan - Anyone done it?

Hey all,

Have googled a fair bit and can only find one thread on the net about this (below)

http://www.rollercoaster.ie/Discussions/tabid/119/ForumThread/11323843/Default.aspx


Pretty much, I applied for a loan (that I assumed I'd be given) but was refused. But I want the loan, and I'm stubborn, so I'm appealing the decision. This pretty much means that I'll have to call into the Credit Union and meet with the committee (a 3-man team I believe, though I could be wrong) and justify the loan in-person to them.


Now, I'm pretty confident I'll be given the loan (I think it's a bit silly they refused in the first place, to be honest - I've a stellar repayment history with them, and I'm so far ahead on repayments of my current loan that I'm in next year) but as I've never been through this process before, I just thought I'd ask on here if anyone has?


Cheers ladies and gents.

Boardnashea

Each CU will probably treat this process differently. Can you find out why the original application was not approved? Have you provided all required documents? Are there any extra you could bring in? Are other borrowings also up to date?
Best of luck.

Boardnashea

Boardnashea wrote: »

Each CU will probably treat this process differently. Can you find out why the original application was not approved? Have you provided all required documents? Are there any extra you could bring in? Are other borrowings also up to date?
Best of luck.

Cheers Boardnashea.


Well I'm in Drogheda CU.

I got a loan of €4,000 in February (car loan). I had €750 in savings at that time. I currently still owe them €2,400 on that loan, but I'm over €1,000 ahead with my repayments.

This loan, also a car loan, is for €5,000 (so I'll owe them €7,400 in total. My current savings are €1,000). The reason it was rejected was because they felt it was too soon for a top up loan as I already got a car loan in February.

I've volunteered a stipulation to the loan: that I won't/can't apply for another loan until my current loan is cleared completely, and an agreed repayment of €80 per week (to clear the €7,400 in about 2 years or so).

Looking to buy a specfic car, which is well-priced for what it is, and I know it'll sell now before I get this loan.


What I'm looking to do is see if anyone has any experience with this kind of thing and if they could offer any advice or insight into the process and what actually happens. Although Im confident I'll get it, I'd rather not walk in completely blind if I can avoid it.

EDIT: I've had loans with the CU in Drogheda for about 7ish years now on and off, and I've always kept up repayments. Without trying to sound too confident, I'd consider my repayment history to be pretty stellar. I've fallen into arrears once (of about €20), but was quick to over-pay and go into advance payments with that particular loan. I don't really understand why they rejected it. Bit annoying to be honest (As they always seem to say that your repayment history is a major influence in future loans).

kippy

Deleted User wrote: »

Cheers Boardnashea.


Well I'm in Drogheda CU.

I got a loan of €4,000 in February (car loan). I had €750 in savings at that time. I currently still owe them €2,400 on that loan, but I'm over €1,000 ahead with my repayments.

This loan, also a car loan, is for €5,000 (so I'll owe them €7,400 in total. My current savings are €1,000). The reason it was rejected was because they felt it was too soon for a top up loan as I already got a car loan in February.

I've volunteered a stipulation to the loan: that I won't/can't apply for another loan until my current loan is cleared completely, and an agreed repayment of €80 per week (to clear the €7,400 in about 2 years or so).

Looking to buy a specfic car, which is well-priced for what it is, and I know it'll sell now before I get this loan.


What I'm looking to do is see if anyone has any experience with this kind of thing and if they could offer any advice or insight into the process and what actually happens. Although Im confident I'll get it, I'd rather not walk in completely blind if I can avoid it.

Almost 7.5 times your savings would normally be too much to loan out (in the two CU's I am involved with anyway)
Not sure how I'd approach it to be honest but I would think the CU were within their rights to refuse the second loan.

chris85

kippy wrote: »

Almost 7.5 times your savings would normally be too much to loan out (in the two CU's I am involved with anyway)
Not sure how I'd approach it to be honest but I would think the CU were within their rights to refuse the second loan.

Absolutely would say the CU were right here. Unless the savings have changed a lot having only €1000 savings with over €7000 in loans if you got this would be poor lending decision. Also it is very strange to have a top up 4 months later for same thing as before. SOme CU's dont allow a top up within 6 months to a year from when loan got.

Also repayment history is important but you seem to think thats the only factor here. A lot more lending criteria than that.

kippy

kippy wrote: »

Almost 7.5 times your savings would normally be too much to loan out (in the two CU's I am involved with anyway)
Not sure how I'd approach it to be honest but I would think the CU were within their rights to refuse the second loan.

Whilst I'm aware that the loan/shares ratio is a bit steep on this, I'd have assumed the Credit Union would generally take a more common sense approach to loaning.

Which is why I mentioned my repayment history (and being a long-time CU member). I'll hardly be skipping the country over €5,000, so they're essentially guaranteed I will repay the loan.

Even if I lost all the work I do, and was reduced solely to a Social Welfare payment and had to re-organise my repayments (all a real worst-case scenario) I'm 24, so it's unlikely that I'd die or such in the period that it'd take me to repay (plus I'd have a car that I could sell to recoup money, if need be).

What I'm more interested in, really, is what happens to someone appealing a loan. Is it just pretty much answering a questionnaire to them or do you plead your case or do you have to justify the loan or...? Just not really sure what to expect to be honest.

(I'm still pretty confident I'll get the loan though )

kippy

Deleted User wrote: »

Whilst I'm aware that the loan/shares ratio is a bit steep on this, I'd have assumed the Credit Union would generally take a more common sense approach to loaning.

Which is why I mentioned my repayment history (and being a long-time CU member). I'll hardly be skipping the country over €5,000, so they're essentially guaranteed I will repay the loan.

Even if I lost all the work I do, and was reduced solely to a Social Welfare payment and had to re-organise my repayments (all a real worst-case scenario) I'm 24, so it's unlikely that I'd die or such in the period that it'd take me to repay (plus I'd have a car that I could sell to recoup money, if need be).

What I'm more interested in, really, is what happens to someone appealing a loan. Is it just pretty much answering a questionnaire to them or do you plead your case or do you have to justify the loan or...? Just not really sure what to expect to be honest.

(I'm still pretty confident I'll get the loan though )

Generally, most credit unions have a policy about the multiplies they will loan to you, with the first loan generally tighter.
The two I have been involved in generally offer up to 4-5 times your savings up to a maximum amount of approximately 30000. Indeed they have many other stipulations about how they lend as well and top ups generally aren't applied in as short a period as what you are looking for.

kippy

kippy wrote: »

Generally, most credit unions have a policy about the multiplies they will loan to you, with the first loan generally tighter.
The two I have been involved in generally offer up to 4-5 times your savings up to a maximum amount of approximately 30000. Indeed they have many other stipulations about how they lend as well and top ups generally aren't applied in as short a period as what you are looking for.

That's a very useful insight, and one I appreciate, Kippy. Thank you.


I'll be paid from a job on Friday (Which I will use to knock an additional €600 or so off my loan, and perhaps add an extra €20-30 onto my savings).

Theoretically I could put back my appeal until next week and be in a healthier situation (or just use the €1,000 i'll be paid on friday and pay it into my savings, to reduce the multiple of money that I'm borrowing, if that makes sense?) but my fear would be the car I want being sold in the mean time.

T'is a bit of an awkward one.

Anyone

They told you the reason the loan was rejected, paying more into savings and/or off the loan isn't going to change the fact you got a loan in Feb for a car.

chris85

chris85 wrote: »

Absolutely would say the CU were right here. Unless the savings have changed a lot having only €1000 savings with over €7000 in loans if you got this would be poor lending decision. Also it is very strange to have a top up 4 months later for same thing as before. SOme CU's dont allow a top up within 6 months to a year from when loan got.

Also repayment history is important but you seem to think thats the only factor here. A lot more lending criteria than that.

Just seen your post (somehow missed it initially). Credit Union are, of course, free to reject any and every loan application. It's their money, after all. I have no right to a loan and I don't play the "entitlement" card like a lot of people. If they told to go and f*ck and slammed the door in my face, I'd still keep up regular payments and clear my debt with them as agreed.


So I'm not trying to be the "well I'll show them!" Mr Big Shot or anything.


I do think it would be a poor lending decision if it was the case of a first loan or such. I'd be annoyed to hear of my CU giving some randomer seven times their savings of a loan if there was no solid track record of repayments (however, I do have such a background with the Credit Union, which is why I'm of the opinion that I should be granted the loan, but I'll obviously have bias as I'm talking about myself here).


Whilst it might be unusual for a top up loan for the same thing as a loan from 4 months previous, keep in mind this is a car loan. Any car buyer could be very unlucky and get a car with a timing belt or head gasket issue just about to rear it's ugly head (which can cost the guts of €2,000 to fix on some cars) so a top up loan for a car isn't something that'd strike me as particularly strange (But that's just me, personally).


I won't pretend to be clued into the different lending criteria that may or may not apply. As I say, I was always under the impression that the Credit Union would generally apply a more common sense approach when it came to lending.

Anyone

Anyone wrote: »

They told you the reason the loan was rejected, paying more into savings and/or off the loan isn't going to change the fact you got a loan in Feb for a car.

Yeah but I don't consider 'too soon' to be a real reason. 'Too soon' doesn't affect my ability to repay a larger loan. If I thought 'too soon' was a legitimate reason I'd never deal with the Credit Union in the first place. :P

Anything could cause you to need another loan in a short period of time (from the above example of a car being a mechanical mess and turning into a money pit to other things such as a death, childbirth, etc. that would cause a person to need to spend more than anticipated).

'Too soon' would make sense if I could barely afford to keep up repayments and any further loans would only serve to hinder my ability to repay, but not when I'm over €1,000 in advance on payments on a €4,000 loan.

(That's just my opinion though. I obviously don't know how the Credit Union reach their decisions).

Anyone

Deleted User wrote: »

Yeah but I don't consider 'too soon' to be a real reason. 'Too soon' doesn't affect my ability to repay a larger loan. If I thought 'too soon' was a legitimate reason I'd never deal with the Credit Union in the first place. :P

Anything could cause you to need another loan in a short period of time (from the above example of a car being a mechanical mess and turning into a money pit to other things such as a death, childbirth, etc. that would cause a person to need to spend more than anticipated).

'Too soon' would make sense if I could barely afford to keep up repayments and any further loans would only serve to hinder my ability to repay, but not when I'm over €1,000 in advance on payments on a €4,000 loan.

(That's just my opinion though. I obviously don't know how the Credit Union reach their decisions).

Ok if you are going to appeal their decision, I'd advise you to consider their reason for rejecting you to be real.

After a meeting with the Committee (which turned out to be two people, a man and a woman), my loan was approved.

They pretty much just talked to me and asked a few questions about repayments, etc. Advised that I try to keep saving on a regular basis, even if only a negligible amount, to assist with future loans.

Have to say they were very professional and pleasant to deal with.

(I know this thread's a little old now, but I just wanted to update as I'd forgotten to, and I know that these threads can be helpful and informative for people searching in future, and it's a pain in the ass when there's no final response from the OP saying how it went in the end).


Thanks all for your help.