Banks that give Loans EasilyInstitutions that can easily provide credit
Approval for a mortgage depends on a wide range of issues, such as your present fiscal position, your job position, and your bankroll. When your present circumstance means that you can buy a mortgage for a marriage, you should decide the amount of interest you will repay over the period covered.
Lending calculators are available from many creditors and will help you find out. You can see how much interest you are paying by inputting the initial amount of the mortgage (principal), the interest rates and the amortization time, and thus how much you will be paying back in all. A £10,000 mortgage with a 5% annual percentage point and a 1 year repayment date will earn 272.89 interest, not £500 as you might think at first.
You can find further information in our guidelines for private loans.
Banks: a collection of current case histories on the subject of credit allocation
Much of the bank and credit-related grievances we get are concentrated in the loans area. Behind many of these litigations, whether private or small commercial, is the claim that: the creditor has granted a mortgage or a mortgage, although he should have realized that the client could not have afforded to repay the debt.
In considering client claims, it may be useful for creditors to consider the following general points arising from shared issues that many of the cases we have observed are going through. We do not generally consider granting credit for a particular sale or business to be "encouragement" to the creditor, but this may vary in certain situations.
Creditors are not required to make available "current overdrafts" (e.g. overdrafts), but must act fairly when disbursing a line of credit while the client is making use of it. Below are case histories of some of the loan complaint cases we have received in recent years. You made full use of the open item on your checking account. Thank you.
You also had a face-to-face mortgage from your local banking institution and loaned from various different payment cards. On March 2004, when they realised that they were in difficulties financially but were not sure what to do about it, they went to their local banks. After explaining their position to the mortgage clerk, who said that the banks could provide them with a consolidating loans to help pay off all of their debt, they decided to take out a debt restructuring plan.
Both Mr and Mrs A. agreed with this proposal and took up the loans, which cleared all their outstanding debt and put their checking accounts back into loans. However, the family' s checking accounts were held by the banks, and within a few month Mr and Mrs A had started to be drawn again.
Mr and Mrs A paid a visit to the bench in June to review the situation after finding that they could not meet the ceiling. On their behalf, the bank's credit officers organised another consolidating credit line to meet the current account overdrafts. Here, too, the banks allowed the couple's current account credit to continue, and within a few short month Messrs A. and A. were again in difficulty.
In November, when they went to visit the banks, they received a third credit. As a result, the pair was able to cover the debt it had accumulated since taking out the consolidating credit in June. They were told they were concerned about how they would be paying for all the "extras" they would need during the Christmas season.
At the beginning of 2005, when they found that they had been prevented from meeting their obligations to repay, Mr and Mrs A lodged a complaint with the Court. In our view, the Bank's first offering of a consolidating credit was useful because it converted Mr and Mrs A.'s outstanding debt into a lower-interest debt. By that time the credit was available.
It was the banks interpretation of the concept as an invitation to lend more funds. Both Mr and Mrs A. felt that taking out another credit must be the best way to address the issue, as it had been proposed by the EIB. We think the banks should have made it much more clear that they were unable to inform the pair of their debt.
Of particular concern to us was the Bank's action to grant an extra credit to Mr and Mrs A in November. Knowing the banks' receipts and expenditures should have made it clear that they could not have afforded the repayment of this further one. Both Mr. and Mrs. A. readily accepted that they should assume some degree of accountability for their borrowings.
Mister D. successfully requested a £2,500 credit from his local banking institution to buy and secure a used motorcycle. Soon as he informed his mom about the loans, she lodged a complaint with the banks. Said that her choice to borrow the funds from her boy was "ill-considered and irresponsible" and that she took unfair advantage of her boy's lack of experience.
Ms. D. informed the bench that her boy had been planning to travel one year after graduating. They feared that the repayment of loans would not only stop him from spending less on travel, but would also mean that he had little of it. But she also thought that by loaning him the funds, the banks had given her boy active encouragement to buy a strong motorcycle.
Ms. C. thought the bench should take the credit and take the bike in return. However, the bench did not agree, so that Mrs. C. - with the consent and know-how of her boy - came to us in his name. Clearly, Mrs Dean wanted us to make a statement publicly on the question of granting credit to youngsters.
And we said that we couldn't do that because our job is just to help solve some of the issues. It was clear when we examined the case in detail that the EIB had carried out a due evaluation of Mr D.'s finances before accepting to loan him the funds.
Mr President, we concurred with the Bank's assessment that Mr D. could easily make the reimbursements due to normal work and low expenditure. Mrs. D.'s position that the creditor took unfair advantage of her child was not accepted. A young man of intelligence, he clearly grasped the obligation associated with credit.
He had already chosen to buy the motorcycle before turning to the banks and the creditor had no obligation - or justification - to dishearten him. We had no reasons to get the creditor to depreciate the credit in return for the motorcycle. Mister J. had only been on the job for a few month - as a storeman - when the plant that kept him busy was shut down.
Turning to his own bench, he asked for a mortgage to buy a small delivery truck and some molds. Nevertheless, the loans clerk explained to him that this would not be necessary and that the computer showed that it was "good for the loan". And so the banks gave Mr. J. 4,000 as a private loan.
He quickly ran over his checking accounts and was not able to pay off the loans. In the absence of consultation with Mr J, the data were forwarded by the intermediary to its collection agency, which informed him in writing in due course. Mr J's agreement, she lodged a complaint with the court on his name and said that she should not have given the funds at all.
But when the bench declined to grant the claim, Ms Y sent it to us. Convinced ourselves that the mortgage adjuster was fully conscious that Mr. J. had only a restricted grasp of finance issues. Mister J. had trusted the loans clerk and thought that the statement that he was "good for the loan" was an insurance that he could buy the loans.
Mrs Y and we were in agreement that under the given conditions it was sensible for Mr J to believe that the borrower would encourage him to take out the credit and settle. When applying for the credit, Mr J. had made it clear that his only source of revenue was the state.
During the discussion of the possible use of the credit, Mr J. had voluntarily acknowledged to the bank's credit clerk that he did not have any significant skill or craftsman's background - and had not thought about how he would get to work. Obviously, the credit analyst had collected information about Mr. J.'s finances and his reasons for borrowing.
However, there was nothing to suggest that he had thought about how Mr. J. would make the refunds. It was hard for us to see how any sensible creditor, confronted with the same facts, would have approved the loans. By accepting the appeal, we said to the teller that it should reimburse Mr J. 300 for the hardship and discomfort he had suffered.
They wanted to buy and build the ride as quickly as possible, drew up a detailed commercial map and requested a commercial credit from their local banks. It was a very disappointing pair when their request was rejected and they asked the bench to rethink it. When they were again denied an operating credit, Mr and Mrs N. asked their store managers if there was another way to obtain the necessary moneys.
First, the store clerk said the bench couldn't help. But they were very stubborn and he finally accepted to agree to arrange a private credit. As they had not made the expected profit, Mr. and Mrs. N. were soon no longer able to make their credit payments. Upon being approached by the banks, the pair said the banks were complicit.
From its point of view, therefore, the EIB should be willing to pay part of the loss. However, the Bank's first reaction to its overall credit rating made it clear that it did not consider the planned project to be a particularly good credit exposure. We did not therefore agree that the pair had been discouraged by the banks from borrowing.
Both Mr. and Mrs. N. had clearly realized that the transaction was a high-spec speculation. They had insisted that they still wanted to go on. As Mr and Mrs N had taken out a private credit, the institution was not an investor in its own funds.
Just as it would not have been eligible for part of the forecast profit, it was not required to pay part of the loss. Our conclusion was that the EIB was not responsible to Mr and Mrs N for their loss and we dismissed the complain.
We have, however, reiterated the Bank's obligation (under the Banking Act) to handle cases of pecuniary difficulties in a sympathetic and positive manner. Mrs G., a deputy head of a supermarket, successfully requested a credit from the local banking institution, where she had a checking account. 17 of these loans were granted by the state. However, within a few month she found it a battle to make the credit payments.
After complaining to the banks, she said she should make sure she could get the credit before she said she was willing to give her the cash. It thought it should have taken a close look at the expenses from its checking accounts before it approved its credit request. She said that if she had, it would have quickly become clear to her that she had not disclosed all her outstanding debt on the claim sheet.
Mrs. G. voluntarily acknowledged that she had not revealed all her outstanding debt when asked on the credit request. It was our opinion that she was able to understand both the recruitment procedure and the risks (if she gave imprecise information) of obtaining a credit beyond her means.
It was our belief that the EIB had not proposed to rely its decisions on information other than that provided on the application forms. You were right that the banks could have examined the expenditure on Mrs G.'s checking accounts. But we didn't think it would be right to say it had a responsibility to.
However, we did remind the institution of its obligation (under the Banking Act) to handle cases of pecuniary difficulties in a sympathetic and positive manner. Mrs. G. later explained to us that she had turned to a non-profit credit counseling center to help with her overall financing needs. Cooperation between the EIB and the EMEA was established.
Frequently he used the bank draft on his own giro bank but it was usually in the form of a loan for part of the year. But over a six-month horizon, Mr Y became more and more dependent on the possibility of overdrafts. Finally, he arrived at the point where his checking accounts were no longer active at all in the lending business.
Mr Y's project accounting records were all kept in a different subsidiary of the same institution, so the institution knew that these projects were not doing well at all. Her decision was to revoke the credit on the open item on Mr Y's checking account. 4. Y. claimed that the bankrupt had not informed him, so that he had not had the opportunity to put his case in order.
Said he knew only about the redemption of his overdrafts when the banks embarrassed him that his credit was declined when he tried to buy at the grocery store. Y also commented that the subsidiary maintaining his private savings had - wrongly in his opinion - been discussing his finances with the subsidiary maintaining his books.
Thinking that was what had prompted him to "be premature" when he decided to cancel the credit. It was noted that the banks had contacted Mr Y three times in the month prior to the withdrawal of his credit. Every single case he had said that he was dissatisfied with the way he ran his checking accounts.
She had also alerted him that the purpose of the standby facilities was to grant loans on a transient basis rather than on a standing basis. Thus we thought it would have been quite clear to Mr. Y. that the bench was not willing to proceed with his indefinite draw. Normally, we would still require a client to notify a particular banking institution that it intends to cancel an open account asset.
However, on this opportunity, we were convinced that it was appropriate for the EIB to withdraw the facilities without further ado. It was on that date that a check (from one of Mr Y.'s commercial accounts) which he had deposited into his own giro escrow account was given back without payment, bearing the words 'refer to drawer'.
Mr Y had used his credit cards to make several commercial transactions against his value on his own bank statement since the check was cashed. At the time the check was handed back, the bank with Mr Y's checking account had called the other bank to ask if there was a possibility that the check would be cashed, if it would be presented again.
As a result of the check that had been given back, Mr Y's checking account was clearly overextended - well above his limits. We therefore took the view that the bank's withdrawal of the advance was a lawful use of its discretionary powers and did not infringe the Banking Act. He forwarded his complaints to us if he was not able to solve the issues with his own team.
For several years he had kept a checking account with the same institution, and the credit on open credit had always been extended without any comments and automatic. Mr F. said he was angry when he found that the withdrawal had been made by the institution without prior warning. Although he quickly succeeded in transferring his money to another institution, he had been billed considerable interest at the unauthorized charge rates.
Said the bench had made a number of (documented) phone conversations with Mr F. about the difficulty in his accounts. She said she could make extensive in-house memos on her concern about his checking accounts until she pulled the credit. According to the Bank's record, Mr F. had significant difficulty maintaining his balance of payments.
But there was nothing to suggest that the bench had ever communicated its concern to Mr F., either during the phone conversations or at any other point in a while. Mr. F.'s testimony that the phone conversations were short invitations he received at the store for an "account overview" was acceptable.
There had been no concrete information in the phone conversations about his current accounts, and he had been given no grounds to express suspicion that his current accounts credit was in danger. It was a lawful use of its economic discretion to decide the withdrawal of the current credit. We think the bench should have clearly warned Mr F. what would have happened if he had not managed his own wallet well.
She should have given him a suitable period of time before she withdrew the current credit. Mr President, we have agreed that the lack of a clear alert or communication from the EIB has created Mr F. great distress and difficulties because he has been obliged to open a new current accounts at this time.
Thus we said the bench should be paying him 150 in appreciation of the discomfort it had created. It was also considered unjust for the EIB to calculate interest for Mr F. at its'unauthorised' interest after the redemption of the Facilities. We said, therefore, that the EIB should reimburse Mr F. for the amount of the differential between its standard interest and the interest it had calculated for him.