HSBC Loan

emskyxx

Hi there

Earlier today, I called HSBC to apply for a personal loan for £5000 to clear credit card debts and for home improvements.

I have banked with them for 10+ years and in that time have had 3 personal loans, all paid off no problem.

I was made redundant in October 2009 and haven't been able to work since due to disability.

I explained this on the phone and the lady I spoke to said, as my monthly incomings were above the eligible rate I am eligible to apply for a loan.

I did the application over the phone and the lady I spoke to said the decision had been referred to their underwriting team and I would get a decision within 3 working days.

I'm just wondering if anybody knows of any possible reasons that my application has been referred, as previously I've always been accepted straight away.

Also, as it has been referred, does anybody know if it is likely that I will be declined?

Thanks for any help.

Wutang_2

Have a massive guess why it has been referred

immoral_angeluk

Are you living just on benefits?
Do you have other debts?
What's your previous credit history been like?

telecomengineer

All loan applications are now looked at more strictly for Affordability, they look at your income, other borrowings, how you have run these accounts, late payments, defaults, any recent credit searches etc..

Whilst you may have scored enough to apply, the underwriters have the final say once they have looked at your credit-worthiness, some lenders if you are borderline base the interest rate on your score

The fact that you have had loans from them before and payed them back will stand you in good stead

You'll just have to sit tight

emskyxx

Yes, I'm on Disability Living Allowance, Employment and Support Allowance and my partner claims Carer's Allowance.
The person I spoke to went through all this with me, she worked how much I get in total then went through my outgoings and said it looks like I would be able to afford it (as my monthly minimum payment on my credit card is more than what it would be to repay the loan each month anyway)
The only other debt I have is a laptop I bought on credit a couple of years ago, I'm paying £10 a month on that, but thats it.
Previous credit history is generally ok, I was declined a virgin and evans credit card in September last year but I think that was due to the fact I wasn't on the electoral roll at the time. But all my other credit accounts have been fine, I've never missed a payment or made late payments.
Thank you for your help.

FATBALLZ

Your earnings are £0. Would you lend money to yourself?

_Andy_

You've been referred due to income. There isn't any point in anyone speculating about whether you'll be approved or not.

andymc29

I'd guess that they don't class benefits as normal income, as this could very easily change if your circumstances change or government policies change, the income from a full time job is normamly much more secure.

If they decline it, do you have any family members who could take out a loan on your behalf and you pay them back instead?

redpete

I'm just wondering if anybody knows of any possible reasons that my application has been referred, as previously I've always been accepted straight away.

What happened previously is pretty irrelevant. There has been a global economic crisis recently that has largely been caused by lenders not taking sufficient care over the risks they are exposed to. One reaction is that they are now taking much more notice of risk factors - one of which is low disposable income (it would seem reasonable to assume that benefits are sufficient to cover day-to-day living expenses, not pay for things that you might expect to get loans for).

(as my monthly minimum payment on my credit card is more than what it would be to repay the loan each month anyway)

Does that mean that you don't pay off the balance each month? If so then it's another possible reason - you are not able to clear that debt so why would they think you could cope with the new debt on top of that?

emskyxx

redpete wrote: »

Does that mean that you don't pay off the balance each month? If so then it's another possible reason - you are not able to clear that debt so why would they think you could cope with the new debt on top of that?

I'm applying for the loan to clear the credit card debt as the interest rate I'm currently paying on my credit card is quite costly.