Getting a personal loan in Ireland

Lllama

I have been living in Ireland for a little bit over 1 year, and have tried before to get a credit from Tesco Bank ( declined twice, yuhu ), get an overdraft or credit card from my bank ( I admit only 6 months had passed since I had been in Ireland, so that may be the reason for which they declined me ), and now I am looking at a personal loan of about 4000 euros for 3-4 years ( will pay it earlier, but just to be safe I quoted a longer time ). I need that loan to use towards the purchase of a car and pay other things needed for a car ( insurance for example , got the learners permit so that will be pretty expensive ).
I am thinking that a loan can also help me jump start my credit history , since my ICB record is blank , so please do not tell me to get the car with my savings, because I can't get credit history using them.
What do you think are my chances for getting such a loan, and what bank would you recommend ? ( each month I tend to keep in my account around 500 euros after paying all the bills and living expenses, rent payed from my bank account, so the amount I pay is seen clearly, all bills are direct debit , same employer, salary over 50000€ a year gross so a little under 3000 a month net, full life insurance so if anything happens I still would have money to pay the bank, single no kiddies ). Talked with somebody from AIB and the guy at the desk said I look like a good candidate, but kinda worried if the banks are still giving loans nowadays.

mickman

Lllama wrote: »

I have been living in Ireland for a little bit over 1 year, and have tried before to get a credit from Tesco Bank ( declined twice, yuhu ), get an overdraft or credit card from my bank ( I admit only 6 months had passed since I had been in Ireland, so that may be the reason for which they declined me ), and now I am looking at a personal loan of about 4000 euros for 3-4 years ( will pay it earlier, but just to be safe I quoted a longer time ). I need that loan to use towards the purchase of a car and pay other things needed for a car ( insurance for example , got the learners permit so that will be pretty expensive ).
I am thinking that a loan can also help me jump start my credit history , since my ICB record is blank , so please do not tell me to get the car with my savings, because I can't get credit history using them.
What do you think are my chances for getting such a loan, and what bank would you recommend ? ( each month I tend to keep in my account around 500 euros after paying all the bills and living expenses, rent payed from my bank account, so the amount I pay is seen clearly, all bills are direct debit , same employer, salary over 50000€ a year gross so a little under 3000 a month net, full life insurance so if anything happens I still would have money to pay the bank, single no kiddies ). Talked with somebody from AIB and the guy at the desk said I look like a good candidate, but kinda worried if the banks are still giving loans nowadays.

You are on over 50k and only 500 euro in your account ?

Lllama

Sorry I may have wrote incorrectly. I save around 500 euros in my account after I spend for my expenses ( like rent, bills, going out, clothes, food purchases, weekend city breaks sometimes ) each month. Sometimes that amount is higher, or smaller depending on certain expenses, but I said 500 euros/month as an approximate amount of what I save.
Currently I have around 4500 euros saved ( some unexpected medical expenses occurred in my family, and they were not covered by my medical and life insurance so I had to pitch in with some funds, else the amount would have been higher ) , that I do not want to use towards a car purchase for now, since I am thinking in 3-4 years to even apply for a mortgage, therefor I am trying to save up for a future deposit , and also like I said in my first post, looking this way to the possibility of creating a credit rating for me .

Sorry for the confusion.

tenifan

I dont think you need to worry about building a credit rating in Ireland. We don't have the sort of system.. banks would prefer to see you building savings, which shows you can afford to repay a loan. You're more likely to mess up your credit by being declined loans.

Lllama

tenifan wrote: »

I dont think you need to worry about building a credit rating in Ireland. We don't have the sort of system.. banks would prefer to see you building savings, which shows you can afford to repay a loan. You're more likely to mess up your credit by being declined loans.

Thanks for the reply tenifan.

So for my particular situation you would recommend using the money that I have saved, instead of applying for a loan ?

Thank you again

Later Edit : Have banks in Ireland started giving loans or is it still considered to be a recession from a banking perspective ?

mickman

Lllama wrote: »

Thanks for the reply tenifan.

So for my particular situation you would recommend using the money that I have saved, instead of applying for a loan ?

Thank you again

Later Edit : Have banks in Ireland started giving loans or is it still considered to be a recession from a banking perspective ?

You will get a loan no problem but use your savings - why would you want to pay interest

dotsman

Banks have no problem giving out loans for suitable applications.

I see you are with AIB. Why don;t you just apply online? You'll either get an automatic (instant) decision, or a decision within 1 working day (tomorrow). If approved, you then get the money straight away as soon as you accept the decision.

With regards the €500 per month, I would definitely recommend you putting that into a regular savings accounts (it looks a lot better as "specific" savings as opposed to money resting in your account).

With regards using your savings or get a loan, that's up to you. Using your savings would be a cheaper, especially if you intended borrowing for 4 years (why not 1 year)! On the other hand, it is handy to have savings on standby for emergencies. A possible compromise would be half and half (borrow 2K and use 2K from your savings) and pay it off over 1 year (for such small amounts, you can easily afford to pay off over 1 year). That way, you can at least have some credit history in Ireland.

Lllama

Thanks for your replies guys. Very helpful feedback.

I do not bank with AIB, I just went in the bank because it was close to me and I wanted to see what type of offers they have. Would it be ok to apply with say 2 banks and just see which one goes through, and then sign the loan papers with the one I choose, or the one that approves or would this make a big stain on my credit history ?
I like the online application process with them for almost everything, and they advertise very fast response, which again is something I like, so I would even be keen on banking with them.

The only reason for which I am thinking of applying for 4-5 years would be just to be on the safe side, in case something happens ( you can never be to safe ). If everything goes as planned I will be paying the loan faster than the term.

The half and half idea looks pretty good at this point. Keep savings, get credit history ( you never know how bank policies will change and this may become a mandatory requirement ). This way I would be sure to get approved ( me thinks ).

Lllama

Just wanted to add something .. on my previous 6 months bill statement there is a missed direct debit, which was caused by fraud on my account along with a bank mistake. There can be seen the fact that the bank when trying to credit the fraudulent transactions, has debited them, and then has credited them back again, but in that time a bill hit the account. It can also be seen on the account the fact that the bank then fixed the mistake by crediting the missed direct debit fee back to my account, so in the end everything was resolved.

Could this work against me in the case of a loan ? The statement shows something like this - credit applied ( stuck pending ) - debit - missed direct debit - charged for the missed direct debit - credit fraudulent transactions - credit missed direct charge.

Interested Observer

I got an 8k loan from AIB a few years back on a smaller salary than you.

Lllama

I would like to thank you all for your replies and tell you the plan I have decided upon :

I have decided to follow dotsman's idea and I have applied online for a loan of 5k with AIB ( as a non-AIB customer - will be waiting on their call tomorrow ). I have chosen the option to pay back over 3 years ( small monthly amount, and this gives me as a person security in case something happens ).
In this time I will also be able to put money aside into a savings account ( that I plan on opening next week - maybe even with AIB if they approve the loan ) , money which can be used to repay the loan faster ( if again something unbelievable would happen, I work in a big IT company that keeps on hiring in Ireland - it was even on the news, but better safe than sorry ), or in case everything goes according to plan keep saving towards a future deposit for a house.

I sure hope that I get approved, I am pretty anxious and I have already started looking at cars ( keeping fingers crossed for good luck ). I will keep you guys posted about what happens.

Also maybe you know, how long should the process take with AIB as a non-customer ? I read on the forum something about 24-48 hours to get the funds after being approved and signing all the documents, but I am curious until actually getting to sign those documents what would be a time-frame ?

Cheers ! A virtual-pint on me if this all works well

peppa 1986

Why not try your local credit union. They have excellent rates and money to lend

Lllama

I have not saved in a credit union. I was never aware of the way they work until recently, and I would like to build a credit relationship with a bank, keep the relationship in good standing and then leverage it for a possible mortgage.

peppa 1986

You do not have to have a savings record in a credit union to borrow from them. They look at repayment capacity and ability to repay. You could apply and then move some savings in if approved for the loan. Your record will be on the ICB so no matter where you borrow, your loAn history will br recorded.

Lllama

Thank peppa. I was not aware that a person could get a loan from a credit union without having savings first with them.

I have applied in the end as stated with AIB, and I was told that today I should get a response, but nothing as of yet. Curious if they keep their word with the timeframe provided.

Lllama

AIB approved. Signing tomorrow documents. Set for 5 years, but I plan to payback faster, just set a higher time to be safe. Thanks guys !

Virtual-pint !

hfallada

OP if you want a credit history, than apply for a credit card and just pay it off every month