Lloyds bank lending

[Deleted User]

saker75 wrote: »

Because a cursory look at his current account will tell them what he earns and what his outgoings are. Yes of course he may have additional income elsewhere but the bank should at least check.

Only if you have your bank account and credit card from the same bank. I don't. With all the churning of bank accounts and credit cards, as encouraged by this very site, I'd be surprised if anything like a majority only had one financial services provider and/or never changes any.

I have a cash ISA, a Shares ISA, (neither by any means "full"!), 2 credit cards and a current account. Only one of these is from the same provider as any other. (The second credit card has a zero balance.)

WR

Gavin83

saker75 wrote: »

All of my posts have expressly stated that we are paying the money back.

This is a "vent" about the lack of safeguards.

In which case I totally agree with you, the bank should never give £14k of credit to someone with a £17k salary. I'm not sure this is really the right terminology to use given the situation but I wish you the best of luck in paying it back.

GarthThomas

saker75 wrote: »

Hi all

So my partner and I have had our first ever frank discussion about our finances.

And it transpires that he has a credit card debt with Lloyds bank. He owes £14k on a salary of £17k. He has had the card for years and the credit limit has increased steadily, clearly with no reference to income.

We have to pay this back but I'm pretty surprised that a bank would lend at such a debt-to-income ratio. It has increased way beyond his salary - 88% of his income!

I agree, banks are both too trusting, and too willing to treat customers like adults.

None of them are willing to do the right thing, though, and correctly treat some spcustomers as the overgrown children that they are, and take control,of their finances for them.

I'm sorry that you are with someone who's not yet capable of taking on grown-up responsibilities, but at least now you know you can take his cards off him, give him pocket money, and make sure that he gets himself sorted out.

A lot of households were run like this when I was young, with the husband handing over his pay packet on a Friday, and getting a few pounds back for him while the wife kept the rest and managed the household budget. In many ways it was a great model for a lot of people.

molerat

MSE show my affordability for borrowing as poor but I keep applying for cards and get them. My current available credit is twice my income and my outstanding card "debt" is 1.15 times my income and rising - I actually borrowed the money to make card minimum payments this month. I answer all the income questions honestly but the lenders have little insight into my bank accounts and cannot know if I could actually pay it back if the worst happened. My credit reference history does show that I can responsibly handle that amount of debt and that is the gamble they are willing to take. I am of course not actually in debt but using their money to earn me interest, they do not and cannot 100% know that though. The question is of course are the lenders acting responsibly ?

takman

Gavin83 wrote: »

In which case I totally agree with you, the bank should never give £14k of credit to someone with a £17k salary. I'm not sure this is really the right terminology to use given the situation but I wish you the best of luck in paying it back.

I completely disagree with this point of view. Lending is already restricted enough and the banks shouldn't have to treat adults as children and make sure they don't borrow too much.

People who are responsible and sensible with money and credit shouldn't have to loose out because some people aren't

Pollycat

I'd be far more angry with my OH if he'd borrowed/spent irresponsibly than at the financial institution who allowed him access to the money.

Does he have anything to show for this debt?
Or was it just frittered away?
Or was it used for essential spends?

I'd also be concerned that he didn't get himself in a similar mess once it was sorted out.

I suggest a visit to the debtfree wannabe board for advice on reducing your outgoings.

teddysmum

meer53 wrote: »

How would the bank/lender know that it could never be paid back ? You say your partner has had the card for years, how do they know he only earns £17k ? For all they know, he could be on £50k + The person responsible for your partners debt is your partner. Credit limits are just that, limits. They' aren't targets.

Also, they wouldn't be aware of the income level, going on the amounts entering the account; especially in current times where people have other accounts into which a salary could have been paid .


Like the parents who complain that their children run up huge phone bills by playing online games, it is up to you to decide what you can afford and do without what you can't. If banks did force a stricter limit on borrowing, people would complain about that, too.

[Deleted User]

saker75 wrote: »

The OFT guidance is that banks must make a reasonable assessment of the ability to repay debt. Given that Lloyds have the full picture of my partner's financial affairs, I don't believe they did this.

I can bail him out. But this much happen an awful lot to those that have nowhere else to turn.

We saw so many lose their livelihoods before the last crash and it seems we have learnt nothing from it. Consumer debt is still too easy.

How long ago did this situation arise? The OFT haven't existed for a good couple of years it is now the FCA (Financial Conduct Authority) I think it really must come down to the illusive crazy credit scores and it's really unfortunate your partner passed for credit; trust me a trashed credit report is somewhat of a safe guard. Before you get pushed to the bottom feeding lenders anyway, which will eventually stop the banks lending to a whole big group if it really hasn't already.

I couldn't believe that for £200 I chose to borrow of a credit limit available of £750 from an 'innovative' lending company but nonetheless failing into above mentioned category (because no one can possibly be responsible right ) that actually no solution could be found to a recent dilemma I had so it turns out credit limit targets are as much to go by as a chocolate tea pot these days.

My bank (also part of this banking group) are fortunately pretty helpful in other ways, just they haven't leant to me in the last 6 years and not likely to in the next 6. Failing it not being about the scores, next it will be credit worthiness on the type of bank account held... Ludicrous I know :cool:

saker75

takman wrote: »

I completely disagree with this point of view. Lending is already restricted enough and the banks shouldn't have to treat adults as children and make sure they don't borrow too much.

People who are responsible and sensible with money and credit shouldn't have to loose out because some people aren't

But they already are. The number of defaults and bad debts written off is costed into the interest rates paid by all. Reduce the risk of such non-payment, by being more discerning with lending criteria, would improve the situation for you.

Pollycat

saker75 wrote: »

But they already are. The number of defaults and bad debts written off is costed into the interest rates paid by all. Reduce the risk of such non-payment, by being more discerning with lending criteria, would improve the situation for you.

I don't pay interest on any of my credit cards.
That's the easiest way to improve your financial situation.

I hope your partner has learned the lesson.