Loan after defaulting due to disability

survivingtheright

Hi all,

4 years ago I defaulted on a loan due to an unmanaged and recently diagnosed disability. I am now thankfully sorted, the debt is paid off and I now run a successful business.

A few weeks ago I contacted my bank to ask for a £20,000 loan of which I can prove affordability, but unfortunately this was refused due to the 4 year old default.

What are peoples thoughts around the fairness of this? The reality is that I default, yes, but this was not because of character or anything other than something that came as a result of my disability - I can even prove that I have now managed this for nearly four years.

Is this fair? What are my options?

Cheers

Gaz83

No-one has a right to credit. Lenders can choose to lend, or not to lend, to whoever they want to. It's not a question of being 'fair' or not. Yes, it sounds harsh, but regardless of the why, the fact is you didn't pay back money you borrowed a (relatively) short time ago.

You could always try another lender. Do you have any savings at all? What were the reasons for the loan and what kind of income do you have?

Another question - did they specifically say they were rejecting you because of the default? Lenders don't usually say why they've rejected someone, just that they have.

Dobbibill

Don't take a rejection personally.

They have to weigh up the risk associated with lending the money.

Would you be able to guarantee 100% that the same wouldn't happen again in the future? No-one's health is ever guaranteed.

Take all the emotion out of the application, it's not about being fair, feeling hard done by, sulking or stropping. It's about risk.

Would you lend money to someone you knew had defaulted on previous lending?

[Deleted User]

survivingtheright wrote: »

Is this fair?

Yes, it's fair.

survivingtheright

Gaz83 wrote: »

No-one has a right to credit. Lenders can choose to lend, or not to lend, to whoever they want to. It's not a question of being 'fair' or not. Yes, it sounds harsh, but regardless of the why, the fact is you didn't pay back money you borrowed a (relatively) short time ago.

You could always try another lender. Do you have any savings at all? What were the reasons for the loan and what kind of income do you have?

Another question - did they specifically say they were rejecting you because of the default? Lenders don't usually say why they've rejected someone, just that they have.

Thanks for this Gaz. I respectfully disagree with your first point. There should be the equality in lending that we see in other areas. Had I not had this default then they would have made the loan available.

For instance. If man (a) and man (b)'s histories and salaries are the same, but half way through their first ever loans man (b) becomes disabled, something of which came out of the blue, and this disability caused him to have reduced income for a short while leading to a default. The both man (a) and man (b) went one to finish payments of their loans and get on in life. The the pair went to get a new loan four years down the road, (a) was accepted and (b) was declined, how can this not be classed as discrimination as in the Equality Act 2010?

As I said above, I can prove affordability and I currently have 5k.

The money is to go towards a houseboat.

[Deleted User]

survivingtheright wrote: »

how can this not be classed as discrimination as in the Equality Act 2010?

Because the difference is due to the inability to repay the debt, not the disability.

survivingtheright

Deleted_User wrote: »

Because the difference is due to the inability to repay the debt, not the disability.

No, the inability is a result of the disability.

Dobbibill

I think you have misunderstood the Equality Act.

You have not been discriminated against from your disability. You have failed to adhere to the T&Cs of the previous lending.

Regardless of disability, if either man a or b defaulted he would be a bigger risk for lending in the future.

Dobbibill

survivingtheright wrote: »

No, the inability is a result of the disability.

Did the T&Cs of the previous loan state that there would be no default against the debt if the inability to pay was caused by an unforeseen disability?

meer53

Lots of disabled people borrow money and repay it. You failed to repay your loan, thats why you've been declined another one, not because you are/were disabled.

YorkshireBoy

survivingtheright wrote: »

What are my options?

It possibly should have been done at the time, or at the latest once you'd repaid the debt in full*, but how about putting a notice of correction on your CRA files detailing the circumstances of the default, and what you did about the debt just as soon as you were able to.

What other lines of credit have you had/held on to since the default, and were they well managed? And if they were, since you're adding it now, you may wish to state this on the NOC.

Have to say though, £20K is one heck of a loan for anyone...let alone someone with a less than perfect credit history.


* You did settle the debt in full didn't you?