Credit Union rejection.

Fimurcom

Just wondering if someone can help.
My 26 yr old daughter applied last week for a credit union car loan of €10,000. She is a first time borrower, has saved the required amount needed, provided all the relevant documents (pay slips, 3 months of bank statements, proof of address etc), has a full time job & no other debts and had 2 guarantors lined up just in case.
She was called into see the manager today and told that the only way she could get the loan is if she could get someone who is a long time regular saver and who had a good savings balance and no outstanding loan to go as guarantor. But that the guarantors account would be frozen (they can't access their savings or apply for a loan)until such time that the car loan was paid off. I've never heard of this before. Is this normal?

Spocker

Does your daughter have an account in the Credit Union?

You mentioned "the required amount needed", what do you mean by that?

It's not unusual for a guarantor to be asked for (depending on the intending borrows history, or lack of, with the Credit Union). They are also not quite correct in saying that the "guarantors account would be frozen", but the guarantor does become jointly liable for the loan, and they can be impacted if the loan is defaulted on

JustJoe7240

Spocker wrote: »

Does your daughter have an account in the Credit Union?

You mentioned "the required amount needed", what do you mean by that?

It's not unusual for a guarantor to be asked for (depending on the intending borrows history, or lack of, with the Credit Union). They are also not quite correct in saying that the "guarantors account would be frozen", but the guarantor does become jointly liable for the loan, and they can be impacted if the loan is defaulted on

Credit unions require a certain amount of the loan amount to be saved, as a deposit of sorts, it depends on the credit union, But in my case, I had to have 10% of the value of the loan in my account

the_syco

Fimurcom wrote: »

Just wondering if someone can help.
My 26 yr old daughter applied last week for a credit union car loan of €10,000. She is a first time borrower, has saved the required amount needed

How long did it take for her to save, and how secure is her job?

Fimurcom

Spocker wrote: »

Does your daughter have an account in the Credit Union?

You mentioned "the required amount needed", what do you mean by that?

It's not unusual for a guarantor to be asked for (depending on the intending borrows history, or lack of, with the Credit Union). They are also not quite correct in saying that the "guarantors account would be frozen", but the guarantor does become jointly liable for the loan, and they can be impacted if the loan is defaulted on

Yes, she has had this Credit Union account since childhood. She had saved almost a third of the amount she was looking to borrow so had a good savings history. We expected that a guarantor would be requested but not that their savings would be frozen. And not only that but she was told that the guarantor would have to have at least the amount she was looking to borrow in their savings if not more.

Fimurcom

joecass123 wrote: »

Credit unions require a certain amount of the loan amount to be saved, as a deposit of sorts, it depends on the credit union, But in my case, I had to have 10% of the value of the loan in my account

She had almost a third of the amount saved that she was looking to borrow.

Fimurcom

the_syco wrote: »

How long did it take for her to save, and how secure is her job?

She has had the account since childhood, dipping in and out. But she started saving hard before Christmas with the hope of getting a car. Her job is full time, she has been there 4 yrs and has no intention of leaving it.

Purple Mountain

This all does sound very OTT to me.

FrStone

Sounds like madness. Get her to apply online with her bank. If with ptsb she should be approved instantly.

Barti

I literally went through this exact process a couple weeks ago to buy a car. Pretty much the same, I had almost 50% of the loan in savings, saved up over the last 6 months mostly. I applied online, got a call back to come in with the documents, and was approved within a half hour. The only reason I can think of might be if there were irregular outgoings or something odd on the bank statement, though I had a few instances of buying lotto tickets listed on mine and still no problem.

Very odd that this need for a guarantor and have the full amount of loan saved. I would question the need for all that, as mine was all handled on my own with no need for any third parties to be part of the agreement. Repayments on a 10k CU loan are low enough if you spread it out, so there should be no reason not to be able repay when in full time employment. Definitely worth questioning the CU loan officer to see why this additional security is needed for the loan.

weisses

The Cu is such an outdated entity at this stage. Why would someone go through all that hassle to get a small loan while the same process written your bank takes about 2 minutes

henryforde80

It all depends on their earnings and current outgoings which is why it most likely was rejected.

Too many current loans, bad credit history, rent/mortgage, not earning enough etc.

Try Chill Money, there rates are actually quite good.

Fimurcom

henryforde80 wrote: »

It all depends on their earnings and current outgoings which is why it most likely was rejected.

Too many current loans, bad credit history, rent/mortgage, not earning enough etc.

Try Chill Money, there rates are actually quite good.

Her earnings are very good and only outgoings are rent & bills. No debts, she did a credit history check prior to applying which came back clean. Its a very strange situation.

Reati

Barti wrote: »

though I had a few instances of buying lotto tickets listed on mine and still no problem.

Off thread side note on this as there is a little myth around this. You can have lotto tickets and even betting on your account and the bank will still approve you (even for a mortgage) as long as you meet the requirements for income / expenditure.

What you can't have is excessive betting or risk transactions where you clearly cannot prioritize the money and make the loan repayments.

Fimurcom

##UPDATE##
Thank You to everyone for replies and advise. After the rejection last week DD applied for a loan through her bank & was accepted straight away. Had funds within 30 mins. She went back into Credit Union at weekend to inform them that she was withdrawing her savings & clerk on duty queried this as the information on file stated that loan had been approved. DD stated what she had been told last week but this information was not included in the file. Very bad situation avoided I believe.

testicles

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