Small Car Loan - Where to look

Dave14

Registered User
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2
Hi Folks,

Apologies first off if this isn't the correct forum for this question.

I am looking for a relatively small loan to fund the purchase of a used car. Seeking in the region of €5,000. My personal banking is with AIB. No loans or overdraft, have a credit card with a €1,500 limit but generally keep it clear.

I applied to AIB for a loan of this amount about a month ago and was refused, no reason supplied. I got a copy of my ICB report and it looks perfect. Had a BoI loan when a student in 2009 and cleared on time with no missed/late payments.

From thinking about it, what comes to mind as a potential issue getting a loan from AIB is that I am technically self-employed. I am an external contractor, but have a almost two years left on a solid fixed term contract. My gross income from this is about €40k p/a, net into my AIB account per month about €2,200.

Am I wasting my time chasing up AIB or should I look at opening a Credit Union account and starting to save there regularly before seeking a loan? I have about €1,500 in my AIB savings account that I could lodge into the CU also.

Many thanks for any advice.
 
I think a credit union might be the way to go. Why not approach one in your area and explain your situation. best of luck
 
Get a finance quote from a car dealership many of whom do finance. I'd also be asking AIB why the loan wasn't a runner. Credit unions are expensive when you factor in tying up your savings, for security, over the course of the loan repayments.
 
Get a finance quote from a car dealership many of whom do finance. I'd also be asking AIB why the loan wasn't a runner. Credit unions are expensive when you factor in tying up your savings, for security, over the course of the loan repayments.

The dealerships almost certainly go through the same process as AIB. It is definitely worth going in and explaining your situation to your local branch and trying to find out if they can do anything. I'm in the same position but on a much higher income with considerable savings which I have evidence of so I think this helped me during my Danske to PTSB transfer. It helps to actually bring in a contract copy and if you are lucky enough to have renewals this will help.

Unfortunately contract workers are lumped in with "ordinary" self employed which means you might as well have bubonic plague where credit is concerned. Colleagues on 100k+ pa with additional sources of income are being refused very basic small levels of credit (eg overdrafts/credit cards). Those making credit decisions have very poor understandings of contract structures & so tend to reject everything as "risky" even where it might not be. Unfortunately the credit union might be your only option for now.
 
Dave 14;
AIB made such a mess of their lending they now start with the notion , that like them you too are not creditworthty , they will not willingly give out any unsecured lending.

They do not , nor should they give a reason for not lending, it is their money=their call.
Your ICB is clear , so you can readily approach anyone eg Credit Union .
You are looking for finance on a car , so most garages are running their own in-house lending , so with a clear icb they will talk with you.

Just keep an eye on their charges.
 
The dealerships almost certainly go through the same process as AIB.

A lease agreement through a garage will see the finance house owning the car until the finance is repaid, unlike a term loan where the cars is yours once you hand over the cash ( term loan ) for it. No security with the term loan.
 
Dave 14;
AIB made such a mess of their lending they now start with the notion , that like them you too are not creditworthty , they will not willingly give out any unsecured lending.

They do not , nor should they give a reason for not lending, it is their money=their call.

Why not ? What if a mistake was made in the underwriting process? OP if you want to know the reason they refused your loan application make a request under the Data protection Act for all the information they hold about you.
 
Under data act, what you will get is the information they hold. From what is written there is nothing untoward in anything ither customer or aib have done , it is just AIB do not want the business as proposed. I am not an AIB fan but it is their call whether they give out money or not.OP will not get that reason. AIB can make umpteen errors in their process but this is not a process issue, it is an underwriting issue.
There is no requirement in normal business for any lender to give a reason why they will not lend.It may though be a courtesy to at least let a good customer down gently.
 
Thanks for the advice and feedback guys.

The whole self-employed situation when it comes to credit is a bit of a pain it seems. It's funny as if I was a permenant employee I would be earning less than contracting, particurally as I am still quite young, but would have greater access to credit. I can understand the banks position though in terms of long-term security.

I am going to open a CU account this weekend anyway as would be good to put some money away every week anyway. In the short term however, I will look into the financing options through dealerships.
 
From thinking about it, what comes to mind as a potential issue getting a loan from AIB is that I am technically self-employed. I am an external contractor, but have a almost two years left on a solid fixed term contract. My gross income from this is about €40k p/a, net into my AIB account per month about €2,200.

Am I wasting my time chasing up AIB or should I look at opening a Credit Union account and starting to save there regularly before seeking a loan? I have about €1,500 in my AIB savings account that I could lodge into the CU also.

Yes, that's your problem. As far as the banks are concerned, you are the financial equivalent of bubonic plague. They just don't want to know. I had to produce years of statements, tax returns etc to PTSB just for a credit card. Lucky I had savings put aside to replace my car ...
 
Thanks for the advice and feedback guys.

The whole self-employed situation when it comes to credit is a bit of a pain it seems. It's funny as if I was a permenant employee I would be earning less than contracting, particurally as I am still quite young, but would have greater access to credit. I can understand the banks position though in terms of long-term security.

I am going to open a CU account this weekend anyway as would be good to put some money away every week anyway. In the short term however, I will look into the financing options through dealerships.

Well the big laugh is that even "permanent" employees get laid off.
 
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