A friend has had an application for CU loan refused for 70,000. He has a public sector job earning 40,000. Around 10,000 on deposit in the credit union. Around 20 years ago he defaulted on a bank loan for around 25K. It was to set up a business. He didn’t/couldnt pay it back. Could this be the reason and any advice? He is considering buying a house and tried the CU to see how a loan application might go.
Refused loan - help
- Thread starter January25
- Start date
He should request a copy of his credit report from the CCR at the following link
www.centralcreditregister.ie
Also the credit union should have told him why his loan application was rejected.
Apply for your credit report and other rights
Information for borrowers about the Central Credit Register
www.centralcreditregister.ie
Also the credit union should have told him why his loan application was rejected.
Last edited:
Talk to the bank and try and negotiate a settlement. However that will stay on his CCR record for another 5 years. There are consequences for not paying your debts.
In hindsight, obviously it would have been better to set up a company for the business and borrow under the company name but the bank probably would have insisted on a personal guarantee anyway.
In hindsight, obviously it would have been better to set up a company for the business and borrow under the company name but the bank probably would have insisted on a personal guarantee anyway.
Is it statute-barred after such a long time?
If the loan is statute-barred thought the last thing that you should do is make any contact or offer but perhaps the debt remains on the credit history?
Even if it's statute barred so that the lender can't use the law to enforce repayment, won't it still remain outstanding on the borrower's CCR report? And that's the problem that needs to be dealt with here which can only be dealt with by repaying the loan or an agreed settlement figure?
Bank Manager
Registered User
- Messages
- 342
1. get your credit report and 2. establish what the reason was for the decline decision - it may have nothing to do with the previous debt...
Brendan Burgess
Founder
- Messages
- 58,575
Am I missing something here?
He has a loan outstanding of €25,000 and has €10,000 savings.
He should repay his loans. That is the right thing to do.
I certainly wouldn't lend to someone who has a cavalier attitude to their debts.
I agree entirely Brendan ! They have a different view. I thought the credit review did not go back beyond 5 years but must be mistaken.
If it’s not sorted he may not be able to buy a house. He doesn’t want to rent forever in the current climate. The rising cost of property might mean he is better to do a deal on the loan now. Rather than rent for the foreseeable and maybe face eviction and a higher rent.
If it’s not sorted he may not be able to buy a house. He doesn’t want to rent forever in the current climate. The rising cost of property might mean he is better to do a deal on the loan now. Rather than rent for the foreseeable and maybe face eviction and a higher rent.
It does, but a 20 year old loan that was never repaid will stay on it until it's dealt with.
How is he going to buy a property for €80K?
Brendan Burgess
Founder
- Messages
- 58,575
If I owe a bank €25k, of course, I can't buy a house.
So is there any chance the unpaid loan issue will disappear even after another 5 years ?
The citizens information gives the impression that the previous 5 years count for credit rating but obviously that’s incorrect. It’s not clearly stated that older events count.
If he waits it out for another five years he will be in his late 50s and may not qualify for a mortgage. He could face eviction and high rent.
So he is best to approach the lender and do a deal. Even though he was advised to never contact them.
The citizens information gives the impression that the previous 5 years count for credit rating but obviously that’s incorrect. It’s not clearly stated that older events count.
If he waits it out for another five years he will be in his late 50s and may not qualify for a mortgage. He could face eviction and high rent.
So he is best to approach the lender and do a deal. Even though he was advised to never contact them.
thecoffeepod
Registered User
- Messages
- 261
"Even though he was advised to never contact them."
By who?
That is the complete opposite of what to do with you are struggling to meet your financial obligations
By who?
That is the complete opposite of what to do with you are struggling to meet your financial obligations
BlackandBlue
Registered User
- Messages
- 230
The devil is in the detail.
All loans are reported until 5 years after they are settled.
And your friends outstanding loan is not settled.
The lender may not be able to legally pursue them for the money which is the defence of "statute barred" the record will continue to be reported as it's a legal requirement.
So even now if they clear it in the morning it will still continue to be reported.
If they do approach the old lender and come to an arrangement they would then need to have this noted on the record.
Brendan Burgess
Founder
- Messages
- 58,575
Generally, the advice would be to engage with the lender and try to do a deal.
I am not a lawyer... I understand that if you are trying to avail of a debt becoming statute barred , the time begins again every time you acknowledge the debt. So it's possible a solicitor has told him this.