Loan Query.

Jaap

I've applied for a loan with Liverpool Victoria, which has been provisionally accepted.

I'm happy with the rate - no problems, but they have asked for my last 3 wage slips, a utility bill, and my last 3 bank statements.

Now my last 3 bank statements are going to show that I have been constantly overdrawn (albeit under my overdraft limit)

Will this have an effect on their final decision?

mrcow

I wouldn't have thought it would be a problem, but I guess it may depend on the size of the loan and the overdraft? Up until last year (when I joined this site), I was in a permanent state of overdraft, and it never got in the way of borrowing further, (but then again, I've never applied with Liverpool Victoria).

Your statements will shown that you have been overdrawn, but will also show that you have stuck to to the terms as agreed with your bank and therefore not incurred any unauthorised borrowing fees.

You could always call them back and check if you are worried, but remember, many people utilise overdraft facilities regularly on their current accounts. If you are keeping the account in order, and not regularly spending more than you earn and thus burrowing onto more debt then I wouldn't see it as a major issue.

On a side note, you are probably being charged through the nose for your overdraft (even though it's agreed). It's a very expensive way of borrowing and you should try and get rid or sort out alternative arrangements to cover it. It will save you money, and it's much easier to budget yourself when you are dealing with an account that is in permanent credit rather than OD.

BountyHunter

I used to work in Personal Loans for a major bank who only looked at the transactions if there was suspected fraud/money laundering etc & if that was the case, they were only looking at specific customers.

The main reason they ask for a bank statement is to verify your address & also as you appear to have satisfied their initial lending criteria it shouldn't matter that you are/were overdrawn.

Jaap

BountyHunter wrote:

I used to work in Personal Loans for a major bank who only looked at the transactions if there was suspected fraud/money laundering etc & if that was the case, they were only looking at specific customers.

The main reason they ask for a bank statement is to verify your address & also as you appear to have satisfied their initial lending criteria it shouldn't matter that you are/were overdrawn.

Thanks BountyHunter, Mrcow.