No to overdraft but yes to loan

sarahcc

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millsee

I'm not sure what advice you are looking for.

Could she just not accept the loan?

grumbler

Lending 1-year salary is a common practice. What advice do you want? The only thing you can do is to explain to your 'adult' daughter how dangerows and expensive this is.
This today's show can be very helpful: BBC Whistleblower on banks.
Also advise her to have some reading of the Debt-Free Wannabe board ...

Debt_Free_Chick

sarahcc wrote:

I have just found out that my barely 20 year old daughter has got a £300 overdraft. She went into her branch and asked for an increased amount of overdraft which they declined. They then said yes to her having a £14,000. loan. She only earns £14,000 a year, this is to be paid over 5 years, I know that she is an adult but find this disgusting behaviour of a bank to allow this. Grateful of any advice/information.

But presumably you'd have no issue if she were given a mortgage representing 3 or more times her salary?

Being given the option to borrow is not the root cause of the debt problems we have in this Country. Provided borrowers understand what they're letting themselves in for and can budget accordingly, then there's not a problem. That said, anyone who can budget wouldn't need any credit - other than a mortgage.

A bank is a business and of course they will offer lines of credit - but generally only to those people that they believe have the means (and track record) to pay them off. So that the bank earns plenty of profit by way of interest.

What is more worrying is why does your daughter have an overdraft and why does she need to increase it