Refused an OD by Ulster Bank

Linoge

My bank has just refused me an overdraft as my wages aren't mandated into that particular account (separate bank). The purpose of the overdraft was for emergencies only and was a "free" facility as part of the Ufirst EUR 10 per month fee. I provided them with account statements showing a very healthy bank account, earnings and substantial savings so there is no way it relates to credit (and they admit this).

This is a facility they have advertised as part of the bank account and have now refused it for what looks like an arbitrary reason. If wages being mandated to an account in the same bank was of such high importance, how can you get a mortgage outside of the bank you hold your current account in?

Has anyone any experience with this or have heard this happening before? Thanks

unclebill98

The account you have with UB does come with a interest free OD however its subject to the T&C you agreed too when opening the account. Having wages mandated is clearly one of them

You can apply for a mortgage with anyone again however they would seek that you conduct all your daily banking needs with them as well.

Get your wages mandated and after the 1st wage goes in ask again and get the overdraft.

dotsman

What is the turnover on the account?

To be honest, unless there is regular high value amounts coming into the account, it is probably a good decision by UB.

An overdraft is unsecured lending for cash flow issues. For a standard personal current account, wages are the only regular high value money that comes into an account. Likewise, an overdraft is (or at least, should be) monitored and reviewed regularly by the bank. If your income is going into another bank, how are they to know your financial status on an ongoing basis?

Is there a particular reason you need an overdraft at the moment? Have you tried applying for an overdraft with the bank you wages are paid into?

Linoge

dotsman wrote: »

What is the turnover on the account?

To be honest, unless there is regular high value amounts coming into the account, it is probably a good decision by UB.

An overdraft is unsecured lending for cash flow issues. For a standard personal current account, wages are the only regular high value money that comes into an account. Likewise, an overdraft is (or at least, should be) monitored and reviewed regularly by the bank. If your income is going into another bank, how are they to know your financial status on an ongoing basis?

Is there a particular reason you need an overdraft at the moment? Have you tried applying for an overdraft with the bank you wages are paid into?

It's actually a joint account for rent, bills and day to day spending. There is €2,600 on standing order going in every month for about a year now.

I understand what you mean about monitoring ongoing financial status, but surely that is easily monitored by the standing order going in every month?

The purpose of the OD was purely if the standing orders and rent payment went out of sync.

And I'm not sure about mortgage providers requiring you to do your daily banking with them. What about the mortgage providers who don't do current accounts? And I know people who have a mortgage with UB but current accounts with AIB.

dotsman

To be honest, the 2,600 going in a month sounds reasonable enough. Especially if the OD limit was for half that amount.

Have you tried the bank your own current account is with?

With regards mortgages/home loans:

1. Firstly, they are secured loans with regular repayments where the funds are being used to buy a home, so in a totally different league to overdrafts (high risk, unsecured loans to cover cashflow problems/emergencies/bad financial planning etc).
2. Secondly, once the loan has been drawndown, there is nothing to monitor. Since the customer has all the money, there's sweet fa the bank can do after the fact (whereas an overdraft can be cancelled at any time, and full repayment demanded - typically with 30 days notice). Thus, as long as they are making their monthly repayments, the bank doesn't care about the customer's financial status.

Linoge

dotsman wrote: »

To be honest, the 2,600 going in a month sounds reasonable enough. Especially if the OD limit was for half that amount.

Have you tried the bank your own current account is with?

With regards mortgages/home loans:

1. Firstly, they are secured loans with regular repayments where the funds are being used to buy a home, so in a totally different league to overdrafts (high risk, unsecured loans to cover cashflow problems/emergencies/bad financial planning etc).
2. Secondly, once the loan has been drawndown, there is nothing to monitor. Since the customer has all the money, there's sweet fa the bank can do after the fact (whereas an overdraft can be cancelled at any time, and full repayment demanded - typically with 30 days notice). Thus, as long as they are making their monthly repayments, the bank doesn't care about the customer's financial status.

Thanks for all that. It's put it in a bit more perspective (and taken the sting out a little!). I was fairly raging about it. Felt they had just refused it as it just wasn't going to be profitable for them, but I guess that's maybe not the case.

The whole thing has still put me way off going for a mortgage with them now though...

chris85

Linoge wrote: »

Thanks for all that. It's put it in a bit more perspective (and taken the sting out a little!). I was fairly raging about it. Felt they had just refused it as it just wasn't going to be profitable for them, but I guess that's maybe not the case.

The whole thing has still put me way off going for a mortgage with them now though...

I can understand you being a bit annoyed but I wouldnt rule out going to them for a mortgage just due to a rejected OD. Remember a mortgage is probably the biggest personal financial transaction you will ever make and would not rule out a bank for a small issue like this. Just my thoughts on it. Interest rates would be my primary concern.