Don't understand why being refused

babiki

Hello, hope somebody could help. I have been helping my friend applying for a loan, first we went through his bank, Natwest. He is from EU country,has lived here 4 years, has got job, I thought him a perfect candidate as he doesn't have any debts,not even credit card and sufficient income. Natwest at first approved, but then he got a phone call saying he can't get the loan as his reason was to buy a land abroad, and that is a problem. So we applied to Sandtander, got a refusal letter...We tried again Natwest, got declined straight away. Why is this? Is is impossible now for his to get a loan as he has been refused twice? Is it due to the lack of crdeit history, so the system basically wants you to have debt- credit cards and so on?? Is there any independent adviser that could help? We are totally bewildered by this.

marmitedog

Why doesn't he borrow the money in the country where he wishes to buy the land?

Hax

babiki wrote: »

Is it due to the lack of crdeit history

This is the most likely reason.

babiki wrote: »

so the system basically wants you to have debt- credit cards and so on??

No - they don't want you to have debt - they want you to have a history of being able to pay back any debt that you do have. For example, you most likely wouldn't lend money to a total stranger as you would have no guarantee of getting it back. The same is true for the banks - they need some evidence that they will get their money back.

There may well be other factors. Important information are things like:

• What is their salary?
• How long have they lived at their current address?
• Are they on the electoral role?
• Do they have any other loans? If so, what are the balances? [You've already said that they don't have any debt]
• Do they have any credit cards? If so, what are the limits and the balances? [As above, you've already said that they don't have any debt]
• How much do they want to borrow?

Movies_in_Running

Someone from a foreign country wanting to borrow money to buy land in that country. Would you lend money to them? No, neither would I.

babiki

thanks for your replies...so if he wrote it is for a holiday, nobody would mind? Impossible to borrow money in the other country as he does not have a permanent residence now. Salary is good, same job and address for 4 years, he is not on electoral roll...Oh well my mistake, thought it wouldn't be a problem. Do you think there is a point trying again, or he will be just refused point blank?

KingElvis

You'd need to get on the ER for at least a few months (or years) and stop applying because all the searches will make lenders think you're desperate for money.

babiki

years?? Oh gosh..
thanks a lot

onlypaddy

Not on ER, no debt history. Wants money to buy land in a foreign country.

You may as well stop applying full stop!

chesky369

The banks think that if he comes from, say France, and wants to buy land in France, then he might leave the UK to live on his land in France! Whilst there are arrangements for collecting debts in other countries, it's much more of a hassle for them, so in the present economic climate they will only make very straightforward loans.