Applying for a loan.

Cherry Blossom

Is there anyway of applying for a loan when you work part time and get disability allowance? I think I’ll need around €15,000. I want to buy an apartment and have most of the money. I can easily pay it back when I don’t have rent to pay.

listermint

https://www.boards.ie/discussion/2058231432/applying-for-a-loan

Try applying for the loan. The provider will assess you based on their criteria.

silver2020

Credit union is your best bet

It's not a huge amount of money and they look at the person rather than key figures into a computer that gives a computerized answer.

Cherry Blossom

Thanks, I filled in the online form for the cu I’m with. I don’t have much money there though. I use the bank. I dont think the bank will give me a loan.

silver2020

Makes no difference these days. They will be your best bet at a reasonable rate.

They'll just want to see that you can repay without difficulty. They may ask you to drop in for a chat.

https://www.boards.ie/discussion/comment/118583947#Comment_118583947

So credit union do actually take credit history into account & having none (if that’s the case) might still make it tricky.

That’s not as much of an issue if you have a good savings record even if it’s with the bank. One thing for sure is if you’re spending everything (more or less) you earn they won’t offer a loan at all, they need to see that at least the majority of the time, the outgoings are less than income. Ideally you’ll be holding onto weekly/monthly at least enough to pay back what you’re asking for.

If rent is taking a lot of your money that is a good case to make. (and worth mentioning if you get the chance) making it very clear also that despite the costs of moving and getting setup in the new apartment that this won’t negatively impact your ability to repay.

But if you have savings & your plan is to use almost all that may not appeal to them either. CU can be iffy about loans if you don’t have much savings with them, so offering to transfer any savings to them might grease the wheels there!

If in case you haven’t much credit history and that’s a reason for a rejection, my best advice would be to get a credit card from your bank, use it for the groceries or whatever during the week & keep the money aside to pay the bill on time or use the credit card to buy your groceries for example & when you’re home pay it back.

Just means for a couple months or so you’ll have a perfect record of paying the card on time always & could make you more attractive for a loan. It’s a fair amount, but if affordable, you can demonstrate there’s no issue paying it back & you won’t eat into all of your savings in case it’s needed to make payments in an emergency they’ll likely have no major issue. Honeslty none of what I said might even matter and just your current situation & affordability is there they could be more than happy especially cos you’re buying an apartment!

Cherry Blossom

I’ve had a credit card since I left college that I pay off in full every month. I had a car loan before from the bank but that was 5 years ago that finished. I have a good credit record. I will see what they come back and ask. The online form was very basic so I assume they will want more information.

Ginger83

https://www.boards.ie/discussion/comment/118583947#Comment_118583947

The credit union would be your best chance as banks are not very accommodating at all.

I switched my account to the bank that I have a small mortgage with. I asked for a very small overdraft as the account I was closing had one but as I am currently on a temporary reduced income the lady literally said the computer says no. In the next part of the meeting I handed over ten times the overdraft figure as a lump sum off the mortgage which she gladly took. She then had the neck to try to sell me home insurance after refusing the overdraft.

You are only a number to a bank but your case can be presented in a more personal manner to your local credit union

https://www.boards.ie/discussion/comment/118584420#Comment_118584420

Ah reminds me of when I was declined on my application for 6 months cos eir tried to take a direct debit for a bill they messed up and was nearly €800! 😂 that failed and I was rejected and told to reapply after 6 months cos it sent me into a negative balance for a few hours. (a year in total it took 6 months after opening + 6 over this)

silver2020

https://www.boards.ie/discussion/comment/118584382#Comment_118584382

You will almost certainly get the loan from the credit union.

Cherry Blossom

Thank you all. This is very reassuring. The apartment is up for auction or they are accepting offers of over €20,000 more than the AMV. It’s hard to know what is going on with the seller. Maybe they are just chancing their arm with the higher figure. I can go 5k over the AMV without help. I might call into CU in morning just and explain the situation to them.

Ginger83

https://www.boards.ie/discussion/comment/118584541#Comment_118584541

Yeah I never actually needed to use the overdraft but I just wanted the same as the other account. I never closed the old account so am considering moving back. It will be the new bank's loss.

OP where do you stand if the bidding goes up?

Cherry Blossom

If it goes too high I just have to bow out of the running. I guess I would need to have the loan approved in advance but not go through with it if im not successful. I work in car sales, I see people do the same thing with car loans then change their mind after they get approval. I just need to talk to the CU about it.

Cherry Blossom

They might not be willing to finance an apartment that way. I will have to see.

Dempo1

https://www.boards.ie/discussion/2058231432/applying-for-a-loan

Hi there, slight delay in response but thought about this last night.

So specifically about the type of property being looked at, Mortgage / Personal Loan etc

The Asking price for the Apartment seems extraordinarily low, I'm assuming it may be a part of a liquidation / Repossession sale 🤔

I personally think the price achieved will go way above that asking price so you'll need to ask yourself how far you can stretch. The challenge with such a scenario is knowing how much you'll need to actually Borrow in advance of the auction (Approval in principle )

On the over all question regarding general approval given limited income, I personally think you would have an excellent chance of approval in principle, however the amount approved will still be ultimately based on your income and savings (Deposit), coupled with a true valuation of the property in question and the main challenge may actually not be getting approved but Mortgage Protection insurance OP, which without, a new mortgage can not be drawn down or if you were able to obtain a policy it could be extremely expensive (I mention this, because certain illnesses, which have to be disclosed, will have a baring on wether an applicant can get mortgage protection insurance), ultimately an applicant can get cover after a number of declines but it will be very expensive.

Some might suggest a personal loan and whilst interest rates, much higher and shorter terms you could compare the actual net monthly repayment against your current Rental Payment and if managable, it's a possibility.

Just a few other considerations and these are crucial. As a Mortgage holder there is practically no supports beyond those attached to a disibility payment, be under no illusions, no housing supports, such as HAP will be available. Also its important that depending on the property, on obtaining the key, there's the cost of furnishing and maintaining it. There's also possibly building service / Management charges, which can be applicable to apartment buildings.

Finally, whilst I don't know the status of the property in question, I have to assume its a possible liquidation sale giving guide price, these are fraught with potential legal pitfalls, Title issues, vacant posession, Possible judgments against property etc and will require potentially extra legal searches and expense.

Obviously if a personal loan was obtained and its enough to cover purchase price, additional considerations like mortgage protection not an issue but the property in question will I believe may require additional legal searches etc and costs.

I'm not an banking, insurance, auction expert but just wanted to point out some additional challenges with the scenario laid out in this very particular situation. I say go for it generally but be mindful of additional considerations and costs that can be easily overlooked.