What documents do they ask for? £10,000 personal loan

Candyapple

thomathy wrote: »

How does this work? I have often wondered, since this type of check is mentioned from time to time in these forums. But I cannot see how it is possible. I do not think this information is stored as part of the credit reference agency's file, since no such information is visible when requesting a copy of your own credit file.

I don't think there can be any cross-referencing behind the scenes by financial services firms either, to look at any consistency of answers. This would be completely unworkable, since their application forms all ask completely different questions, for example some ask "How much do you earn?" others "What is your salary" and others "What is your income?", all of which are quite likely to have different (possibly very different) answers. And income is such a variable thing - it might be twice as much next year as this year, or half as much. But neither is an indicator that the stated values are inaccurate.

Do lenders really have any ability to detect income? I don't think they can, unless you put all income through one bank and it happens to be the lender or associated with the lender.

It's called Current Account Turnover - all banks send data back to the CRAs so yes they do have an accurate ability to detect your income.

http://www.telegraph.co.uk/personal-banking/current-accounts/how-your-bank-spies-on-your-exact-monthly-income---and-shares-it/

AndyPix

No one here is going to help you lie to get a loan

ndf9876

Friend of mine bought a car (well, PCP to be exact) about 6 weeks before he passed his test. His dad had to test drive it for him!!

He had no problems getting the PCP and passed his driving test.

Now I know you're talking about a personal loan, not PCP, but I personally feel that you can take two things from this thread :

1. Don't lie, you will be found out.
2. Lenders really don't check precisely how you spend their money, but they DO expect it back.

So my personal suggestion would be to tell the complete truth; if it's a loan for a car, then say so (else consider an alternative way of financing the vehicle).

ReadingTim

ndf9876 wrote: »

1. Don't lie, you will be found out.
2. Lenders really don't check precisely how you spend their money, but they DO expect it back

Your 2nd point contradicts your 1st. If a lender doesn't check how you spend your money, how can they find out if you were, or were not, lying?

(unless you fail to pay it back of course, but assume you do...)

marathonic

ReadingTim wrote: »

Your 2nd point contradicts your 1st. If a lender doesn't check how you spend your money, how can they find out if you were, or were not, lying?

(unless you fail to pay it back of course, but assume you do...)

They have lots of ways to either catch you red handed or mark you as suspicious.

The thread linked to earlier is an example where someone said 'home improvements' and the bank realizing they pay rent.

Let's say I was a bank and you applied to me for a car loan. All is good and I provide it. Three years down the line, you apply for a mortgage. I pull your credit file and realise that I'm the only bank with which you have an account and you've never had car insurance payments come from your accounts, I would be suspicious.

In the above scenario, I'd likely reject your mortgage application and the only reason I'd have to give you is "due to information in your credit file". Banks do not need to go into more details on reasons for refusal.

ReadingTim

marathonic wrote: »

They have lots of ways to either catch you red handed or mark you as suspicious.

The thread linked to earlier is an example where someone said 'home improvements' and the bank realizing they pay rent.

Let's say I was a bank and you applied to me for a car loan. All is good and I provide it. Three years down the line, you apply for a mortgage. I pull your credit file and realise that I'm the only bank with which you have an account and you've never had car insurance payments come from your accounts, I would be suspicious.

In the above scenario, I'd likely reject your mortgage application and the only reason I'd have to give you is "due to information in your credit file". Banks do not need to go into more details on reasons for refusal.

I think that in the linked thread, the bank didn't "realise" anything of the sort - they were told it. There was no pro-active investigation on the bank's part. Furthermore, in your example, it would take a human being with a deeply suspicious mind or a computer programme with an very sceptical algorithm to make those connections. As long as a 3rd year old loan is being paid, and any new borrowing is affordable, would a bank check back to the original purpose for the loan? I highly doubt it, especially if the affordability box has already been ticked, and the computer had said "yes".

In fact, come to think of it, I'm supposed to tell my mortgage company every time I change my job, given my circumstances had changed from the original application. I changed jobs twice in that time, and guess what? - they never found out. Furthermore, this blatant mortgage fraud didn't stop me opening a current account with them 3 years later.

I'm not doubting that there are obviously ways that one can detect whether a loan is being used for its stated purpose, and no doubt data analytics can increasingly automate this. But at best detection is retrospective, and if there aren't any issues with repayment, counterproductive and therefore irrelevant. I just can't see what it would achieve.

ndf9876

ReadingTim wrote: »

Your 2nd point contradicts your 1st. If a lender doesn't check how you spend your money, how can they find out if you were, or were not, lying?

(unless you fail to pay it back of course, but assume you do...)

I should have clarified, don't lie when applying for the money (for example, don't over-inflate your income on the application). Surely that is common sense though?

I stand by my personal opinion and belief that once the loan is approved, lenders rarely check up on you to see what you've spent their money on.

marathonic

ReadingTim wrote: »

Furthermore, in your example, it would take a human being with a deeply suspicious mind or a computer programme with an very sceptical algorithm to make those connections.

In my opinion, anyone that thinks bank mortgage applications do not depend on 'very sceptical algorithms' are deluded. Of course banks are going to have algorithms that look at worst case scenarios when lending people hundreds of thousands of pounds.

These algorithms differ from bank to bank but ALL have hundreds of checks and have been refined over the years.

ReadingTim wrote: »

In fact, come to think of it, I'm supposed to tell my mortgage company every time I change my job, given my circumstances had changed from the original application. I changed jobs twice in that time, and guess what? - they never found out. Furthermore, this blatant mortgage fraud didn't stop me opening a current account with them 3 years later.

For most, if not all, banks, you're supposed to tell them if you change jobs BEFORE drawdown of the funds. After you have your mortgage in place, it doesn't matter unless you go into default or need further credit.

Banks have enough administration costs. Why any would want notified when a person changes job when there's nothing they can do about it is beyond me.

ReadingTim

marathonic wrote: »

For most, if not all, banks, you're supposed to tell them if you change jobs BEFORE drawdown of the funds. After you have your mortgage in place, it doesn't matter unless you go into default or need further credit.

Banks have enough administration costs. Why any would want notified when a person changes job when there's nothing they can do about it is beyond me.

And that's my point. BEFORE drawdown, I intended to buy a car. Afterwards, I changed my mind and spend it on something else.

As you say, there's nothing the bank can do about it, and they have enough administration costs....

fatbelly

michaelmystery wrote: »

I'm looking at getting a personal loan of around £10,000 over 5 years.

What I really want to know, is what documents are they going to ask for?

State why you got the loan and what documents they asked for.

Thanks

AA Loan

Home improvements

Proof of address (utility bill)

ID (certified copy of both sides of Driving Licence)

Took 5 weeks to approve and I'm having to chase up the 'free gift*'. Good apr but customer service not good.

*One night for 2 in a posh hotel - voucher on its way, apparently!