Why can't I get a loan?

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Loz1991
Loz1991 Posts: 1 Newbie
in Loans
My bank (lloyds) always declines my application for a loan or overdraft on their website. My income is only a measly £500 a month in benefits, so I imagine this is the reason. So do I have any other options or is there a possibility of changing my banks mind if I speak to them in person?Are there any suggestions for a money-lender that would consider giving someone in my position a loan?

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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    It's your income.

    You should also check the data on your credit files.

    What is the loan for? There may be a better way, as you're unlikely to get a loan from anyone who doesn't accept broken kneecaps as a form of payment.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    How much do you have left each money 1 day before you get your income and is it paid monthly?
    How much do you want to borrow?
  • Sncjw
    Sncjw Posts: 3,509 Forumite
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    How much is the loan? What is it for and do you have anything left over end of the month
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • System
    System Posts: 178,094 Community Admin
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    There is Oakham who is a scumbag sub prime who will lend to anyone with at least £400 a month benefits income but the interest rates are eye watering at 1421% so borrow £800 for just 6 months and you end up repaying £1502 with weekly repayments of £57 which would be over half your income.

    If you only have £500 a month income the harsh truth of the matter is you cannot afford to have a loan even if someone would lend you it because you barely have sufficient income to meet the costs of feeding yourself and keeping the lights on.
  • downshifter
    downshifter Posts: 1,122 Forumite
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    What about a credit union? I invest in one so that they can help out people in low income.
  • Placitasgirl
    Placitasgirl Posts: 389 Forumite
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    I suspect that you do not match the Bank's lending criteria as your income is made up solely of benefits. The mainstream banks/lenders may well consider that offering you a loan in your situation may constitute "irresponsible lending", hence the reason you're being declined for both a loan and an overdraft.

    There are of course lenders who would offer you a loan; at exorbitant interest rates and as said at risk of knee-capping if you default.

    What is the purpose of the loan and the amount you wish to borrow? Is there a Credit Union in your area who you could approach for the funds you need?
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    edited 18 July 2018 at 1:29PM
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    I see a credit union as your only option OP, might need to be saving with them first but speak to them.

    Depending on the amount the CU might not be able to help.
  • Rosemary7391
    Rosemary7391 Posts: 2,879 Forumite
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    How much are you expecting to repay per month? Can you demonstrate that you'd be able to afford that, ideally by sticking to that budget now?


    Also curious as to what it's for. There may be lots of other options that aren't a loan - if you say, folk will direct you to the right boards to ask about that :)
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    If income = benefits then they won't lend to you.

    Would whatever you need the loan for come under the crisis loan criteria?
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