My experience when borrowing for the first time

porkisnotmeat

aoleks said:

Here we go again with the affordability crap… have you ever thought that banks have badly tweaked algorithms for assessing risk?

Ever thought that the bank's algorithms being overly cautious is by design, rather than being a result of an error?

[Deleted User]

aoleks said:

Here we go again with the affordability crap… have you ever thought that banks have badly tweaked algorithms for assessing risk?

OP says they have significant assets yet says those assets include loans to people (thus are not assets as they could easily not be paid) and wants to take out a loan despite having all these other assets being worth lots more which must be earning vast sums of interest to be worth taking out a loan rather than paying cash.

It's not "crap", it's the lender setting criteria they want. You think it's affordable, they don't and they have the money, so it doesn't matter what the OP has in the bank, the lender doesn't want to lend them money 

Grumpy_chap

astroL said:

We have over 10 times the amount requested and could easily have paid cash for the entire transaction - but we chose not to.  We own our home and have minimal outgoings. It really is a laughable situation with even FD knowing that we had a substantial surplus in the current account.  No excuses needed for FD, they are simply not looking at reality. Clearly SB took a more realistic view.  Whatever could have made them supposedly 'doubt' our ability to replay makes me laugh uncontrollably.  

You have not said what the figures are, and nor do you need to, but banks primarily assess loans on the basis of income.  

Suppose your earnings are £30k and you approach your bank (FD) for a £10k loan to buy a car. 
FD can also see that you have £100k sitting on deposit.
How do FD know that it is not your intention to buy a car for £110k that will have exorbitant running costs that are difficult to maintain on a £30k income?

Sainsbury's Bank, however, simply have the information on your application to make their decision against, so income, other outgoings and the impact of the new loan requested.

astroL

Grumpy_chap said:

astroL said:

We have over 10 times the amount requested and could easily have paid cash for the entire transaction - but we chose not to.  We own our home and have minimal outgoings. It really is a laughable situation with even FD knowing that we had a substantial surplus in the current account.  No excuses needed for FD, they are simply not looking at reality. Clearly SB took a more realistic view.  Whatever could have made them supposedly 'doubt' our ability to replay makes me laugh uncontrollably.  

You have not said what the figures are, and nor do you need to, but banks primarily assess loans on the basis of income.  

Suppose your earnings are £30k and you approach your bank (FD) for a £10k loan to buy a car. 
FD can also see that you have £100k sitting on deposit.
How do FD know that it is not your intention to buy a car for £110k that will have exorbitant running costs that are difficult to maintain on a £30k income?

Sainsbury's Bank, however, simply have the information on your application to make their decision against, so income, other outgoings and the impact of the new loan requested.

The loan repayment is very small compared to our disposal income.  Absolutely no excuse.  Personal choice to loan instead of using cash.

TripleH

I spent 25 plus years with HSBC (bank elsewhere now), customer loyalty means nothing, in fact when we went for a mortgage it actually counted to our detriment as the money we had ring-fenced to do work on the property was decided by HSBC at the last minute (following Brexit vote) to be better off in their pockets as a bigger deposit.

They then messed up the remortgage paperwork when our fixed term ended.

They sent my cheque book to the other side of the world to where I was living as a bonus.

Sadly that is how existing customers are treated  much more focus on winning new ones.

enthusiasticsaver

I am going to take a different view to many on here and suggest that maybe FD had already reached their lending target for the month and put the brakes on new applications for whatever reason. I also don’t think customer loyalty is high on banks agendas these days. I bank with FD and have never had a problem with their service but never applied for a loan with them so who knows. Glad you got the loan with Sainsbury’s anyway.