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Methinkshe

Credit Squeeze

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

No offense to your brother but I wouldn't lend him 15K. Ask the question, why on earth would someone who earns 100K+ and has 500K in equity on his house need to borrow 15k? He should have at least that in an instant access savings account just for emergencies. I might consider lending him 150K if I had it spare, but 15 makes me wonder what he's hiding.

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

Earns well over 100k owns half his house and he wants a 15k loan , do me favour :rolleyes:

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No offense to your brother but I wouldn't lend him 15K. Ask the question, why on earth would someone who earns 100K+ and has 500K in equity on his house need to borrow 15k? He should have at least that in an instant access savings account just for emergencies. I might consider lending him 150K if I had it spare, but 15 makes me wonder what he's hiding.

On my behalf - I am my brother's impecunious sister, dependent on disability and pension benefits. Just trying to help me out. So don't shout your mouth off so damn quick next time. Good Samaritans still exist - especially my brother.

Thing is, you're missing the point. Why was he turned down even if he was looking for a loan to help me out? He is a triple A customer.

Edited by Methinkshe

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On my behalf - I am my brother's impecunious sister, dependent on disability and pension benefits. Just trying to help me out. So don't shout your mouth off so damn quick next time. Good Samaritans still exist - especially my brother.

Hey, no offense intended (hence the introductory phrase), I'm sure you brother is a thoroughly decent guy and I in no way intended to imply otherwise. I'm merely pointing out that credit scoring is not a simple case of income vs. loan amount, other factors are taken into account. This explains why, for example, it's often a lot easier to get a loan to cover a specific purchase in store than for general use even though the exact same lender with the exact same criteria is behind it.

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Thing is, you're missing the point. Why was he turned down even if he was looking for a loan to help me out? He is a triple A customer.

No, I don't think I am - loan decision models have all sorts of wrinkles in them (I had the pleasure of doing some statistical stuff about this decades ago for a phone company) and are not solely about income vs loan size. Someone with a stated large income and assets asking for a small loan sets all sorts of alarm bells ringing for me regardless of the intended purpose.

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

Back in January, I applied to Northern Rock because they had the world beating rate of IIRC around 5.6%.

I got a letter to phone the underwriting department and then after a few questions was told that the loan had been approved.

When I got the paperwork, the rate had gone up to around 9%. No mention in the phone call, and this was not the rate that had been stated when I applied.

As they had messed us around, we used some savings instead.

I even paid a few quid a couple of months down the line to get my credit record, which was impeccable (apparently), so it was either a genuine mistake on their part not to tell me, or disengenuous.

As to "no offence", my 8 year old son, told us in the car a few weeks back that he could insult someone without insulting them:

"You're FAT...No offence."

How we laughed.

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As to "no offence", my 8 year old son, told us in the car a few weeks back that he could insult someone without insulting them:

"You're FAT...No offence."

How we laughed.

If you want to take that interpretation then feel free. If I'd actually wanted to insult the OP's brother, I would have started the sentence with something like 'your brother must be a fool' but I didn't because I have no reason to believe that he is. I think the second part of my post makes it clear what my point is - regardless of who/why/what, a loan application for 15K by someone with stated assets of 500K plus an income of 100K+ is exactly the sort of anomaly that loan application filtering software is designed to spot. A half decent company would follow up with some more investigation before rejecting someone of course, but that's a different issue.

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

Not having a go....i think I'm overpaid sometimes 24k +shift allowance.....to me respectable....

......but 100k+ and envious bonuses.....is so far down the line of respectable its obscene ...IMO...hope he helps you out though as he really can afford to.....just off his bonuses.

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with that size mortgae, your brother doesnt have a lot of headroom left for mortgage interest rises- he may NOT be able to service the 15K loan in a years time and have bread on the table

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To prevent further speculation ...

My brother has previously entered a joint loan with me on the basis of my daughter's DLA (she gets full mobility allowance) because we cannot use the Mobility scheme since if you do more than 12,000 miles pa you get charged 10p per mile. As we live in the middle of nowhere and to get my daughter to and from school = 160 miles per day, it is obvious that the 12,000 miles pa motability scheme is useless. So, 10 years ago my bro helped me to buy a new car and 10 years hence he's helping me to buy another - he gets the loan, puts my name down on it and I repay through DLA. What I find significant is that where once he could have borrowed anywhere without question because of his credit status, (even if I was mentioned in dispatches, so to speak) now he is getting turned down by Tesco. There's something amiss/changed since last time we arranged a joint loan. That's all I'm saying.

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To prevent further speculation ...

My brother has previously entered a joint loan with me on the basis of my daughter's DLA (she gets full mobility allowance) because we cannot use the Mobility scheme since if you do more than 12,000 miles pa you get charged 10p per mile. As we live in the middle of nowhere and to get my daughter to and from school = 160 miles per day, it is obvious that the 12,000 miles pa motability scheme is useless. So, 10 years ago my bro helped me to buy a new car and 10 years hence he's helping me to buy another - he gets the loan, puts my name down on it and I repay through DLA. What I find significant is that where once he could have borrowed anywhere without question because of his credit status, (even if I was mentioned in dispatches, so to speak) now he is getting turned down by Tesco. There's something amiss/changed since last time we arranged a joint loan. That's all I'm saying.

Do you not see?

You;ve had AT LEAST two people on here telling you that turning down your bro for a 15k loan given his supposed circumstances is run of the mill.

Why can he not just lend you the money himself? i.e. out of his pocket

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My brother who earns a very respectable salary (£100k+ pa plus very envious bonuses) has just been refused a £15,000 loan by Tesco = RBS, Natwest???? He has a £1 million + house in Gerrards Cross with less than 50% mortgage. Sounds to me like a credit squeeze when AAA customers are turned down. Okay, he has been able to raise the finance from an alternative lender, but to be turned down with his AAA credit status is indicative of something else....

Thinking of it another way he has a house that in his opinion is worth £1 million and a £500k debt that is real. No wonder he needs to borrow to help you out

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Do you not see?

You;ve had AT LEAST two people on here telling you that turning down your bro for a 15k loan given his supposed circumstances is run of the mill.

Why can he not just lend you the money himself? i.e. out of his pocket

Which pocket? The one tied up in his property, his boat, his other obligations or what? What a daft question. Like people hang around with 15 grand in their pocket ready to dispense....which planet do you live on?

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Which pocket? The one tied up in his property, his boat, his other obligations or what? What a daft question. Like people hang around with 15 grand in their pocket ready to dispense....which planet do you live on?

Mmmm, I live on a planet where I would expect people who have been on large salaries for any length of time to have reasonably easy access to £15k.

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With a £450k mortgage and take home pay of about £6k (based on 20% bonus), he's only left with about £3.5k/month. I say only, because if he's got the house in GX, presumably he's also got the car and golf club membership etc to go with it. He may not be as good a credit risk as you think he is.

Edit: and the boat!

Edited by Dylan

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This simple post makes you realise how complex life can be!

First, your Bro earns a good salary, one which is more than five times the average UK wage, you would therefore think he was creditworthy at some rate of interest. The fact he was refused a loan may be a sign of the times, but the fact is there is always a market for loans and lenders love to give money away providing the rate of return exceeds the market rate, and the risk of default is low. Therefore, there seems to be a rat in the works, here are some possibilities:

- the bro is not truthfull about his income

- the bro is more in debt than you realise

- the bro is not da man and his bonus is small

- the bro never asked for the loan (I presume you paid him back inc. interest)

- the bros wife has put her foot down and told him not to bail out da sis

As for having 15 grand in his pocket, there are many of us out there will real assets in fairly liquid form. We are called savers - the great shame is this government funds debtors at the expense of savers using bogus arguments that allow real inflation to eat away real equity in favor of people like your bro who live off debt. Here is my proposal, if you really are credit worthy and will pay back your debts then I will lend you the money at a rate of 12% interest. This is a serious offer providing you have assets to offer as collateral.

BTW - aint the UK a wonderfull place, you get to live in a remote area and they pay for your transport costs up to 12,000 miles p.a. At 50p per mile thats a benefit of £6000! Here in the USA they would give you $60 to buy a tricycle at Walmart.

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Guest Bart of Darkness
Ask the question, why on earth would someone who earns 100K+ and has 500K in equity on his house need to borrow 15k?

I must admit, that was my first thought.

Mmmm, I live on a planet where I would expect people who have been on large salaries for any length of time to have reasonably easy access to £15k.

I've not been on anything like 100K (and no bonuses either) and yet I could easily lend someone 15k without a bank loan.

Maybe this guy likes to snort cocaine from the heaving bosom of an expensive call girl whilst driving his Ferrari down to the yacht club. That might explain where some of his money went. Or maybe the whole story is just b0llocks (Occam's razor?).

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Maybe this guy likes to snort cocaine from the heaving bosom of an expensive call girl whilst driving his Ferrari down to the yacht club.

That's my fantasy, you can't have it.

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To prevent further speculation ...

My brother has previously entered a joint loan with me on the basis of my daughter's DLA (she gets full mobility allowance) because we cannot use the Mobility scheme since if you do more than 12,000 miles pa you get charged 10p per mile. As we live in the middle of nowhere and to get my daughter to and from school = 160 miles per day, it is obvious that the 12,000 miles pa motability scheme is useless. So, 10 years ago my bro helped me to buy a new car and 10 years hence he's helping me to buy another - he gets the loan, puts my name down on it and I repay through DLA. What I find significant is that where once he could have borrowed anywhere without question because of his credit status, (even if I was mentioned in dispatches, so to speak) now he is getting turned down by Tesco. There's something amiss/changed since last time we arranged a joint loan. That's all I'm saying.

Seriously, unless he got turned down by the exact same lender as 10 years ago using the exact same application and so on, this really doesn't mean anything. If you look through the annual reports of a few big lenders, you'll find that they all turn down a large percentage of people that apply. Applications are rejected for all sorts of reasons, many of which don't relate to the credit rating of the individual. His application could, for example, have failed simply because he hasn't had any unsecured loans in a long time and applying for one pressed the identity fraud button in Tesco's software. Back in the early 90s (when there really was a credit crunch going on), the average clearing bank annual report had dozens of pages about how careful they were being with unsecured personal loans along with charts of how much was loaned to what type of person, what the default rate was and so on. Right now, nothing like that is showing up so I don't think you could say there's any general restriction on the availability of credit happening.

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That's my fantasy, you can't have it.

Morons, the lot of you! I gave a personal illustration of a wider problem - i.e. a credit squeeze, and all you want to do is discuss the rights and wrongs etc of my bro's offer to help me to obtain a loan using his good credit. I was trying to offer a personal illustration (so that morons might believe) of a tightening of credit. Bring back cg. Is there anyone left on this planet, never mind this forum, who can comprehend the general with reference to the particular but without making the particular the order of the day. SHEESH!,

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Morons, the lot of you! I gave a personal illustration of a wider problem - i.e. a credit squeeze, and all you want to do is discuss the rights and wrongs etc of my bro's offer to help me to obtain a loan using his good credit. I was trying to offer a personal illustration (so that morons might believe) of a tightening of credit. Bring back cg. Is there anyone left on this planet, never mind this forum, who can comprehend the general with reference to the particular but without making the particular the order of the day. SHEESH!,

lol.

Your anecdote offers absolutely no evidence of a credit squeeze. What don't you understand about that?

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Morons, the lot of you! I gave a personal illustration of a wider problem - i.e. a credit squeeze, and all you want to do is discuss the rights and wrongs etc of my bro's offer to help me to obtain a loan using his good credit. I was trying to offer a personal illustration (so that morons might believe) of a tightening of credit. Bring back cg. Is there anyone left on this planet, never mind this forum, who can comprehend the general with reference to the particular but without making the particular the order of the day. SHEESH!,

Understood.....but the realism is somewhat detached to that of many a man or woman i know..........using a more realistic comparison might of helped not to get "hang on a sec" respones.....IMO

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Morons, the lot of you! I gave a personal illustration of a wider problem - i.e. a credit squeeze, and all you want to do is discuss the rights and wrongs etc of my bro's offer to help me to obtain a loan using his good credit. I was trying to offer a personal illustration (so that morons might believe) of a tightening of credit. Bring back cg. Is there anyone left on this planet, never mind this forum, who can comprehend the general with reference to the particular but without making the particular the order of the day. SHEESH!,

Why isn't he buying you a car instead of getting you a loan? Isn't he family?

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If you want to take that interpretation then feel free. If I'd actually wanted to insult the OP's brother, I would have started the sentence with something like 'your brother must be a fool' but I didn't because I have no reason to believe that he is. I think the second part of my post makes it clear what my point is - regardless of who/why/what, a loan application for 15K by someone with stated assets of 500K plus an income of 100K+ is exactly the sort of anomaly that loan application filtering software is designed to spot. A half decent company would follow up with some more investigation before rejecting someone of course, but that's a different issue.

I don't take that interpretation, but sometimes the term no offence is used as a shield for insults. I am sure it isn't in your case, but I was surprised my 8yo son knows about it.

No offence was meant in my post btw, just thought it was funny.

Maybe Tesco have decided to cherry pick particular types of people. That is a credit tightening of sorts.

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