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AIBU or are Nationwide? Why won't they lend DS 18 5k?

(72 Posts)
phonemelater Thu 06-Dec-12 20:04:54

DS is 18 and has been in his job for 3 months. He earns more than me £17k and his position is secure.

He lives at home with me and his only interest is sport. He wants to buy a very expensive piece of sports equipment and made a loan request to Nationwide.

He was declined as his credit check showed he didn't meet the criteria. He's 18 and has no credit history, which I presume is the problem. I'd like him to save for the equipment but he wants it now and I think fair enough, its his money. Loan sharks Money lending sites will lend him the money, but I've steered him away from these towards his bank, and now they've said 'no'. Are Nationwide BU? Who might lend to DS?

FreddieMercurysBolero Thu 06-Dec-12 21:36:42

Credit union seem to be the only people lending here. He may have to save with them for a few months first though.

fluffypillow Thu 06-Dec-12 21:35:17

I wouldn't be encouraging an 18 yr old to get into this sort of debt for something he really could wait and save for. There is an important life lesson to be learned here by your Son.
Take the opportunity to make him understand the importance of earning his money BEFORE spending it. All you are doing is encouraging him to get into financial trouble in the future, why would you do that?

YABVU to complain about the bank, you should be praising them for doing your Son a favour.

HoratiaLovesBabyJesus Thu 06-Dec-12 21:33:08

DH borrowed a similar sum from Nationwide for sports equipment (is he a rower, OP?) and deeply regrets it still. He was paying it off for what felt like a hundred years, and had sold the equipment less than halfway through the loan, at a loss. He was 23, was earning more like £24k, and had a solid credit history, so was a rather better bet.

I think Nationwide have been sensible. There must be some other way DS can practise his sport; and if there isn't, he can't afford that sport just at the moment.

OutragedAtThePriceOfFreddos Thu 06-Dec-12 21:31:15

I really want to know what this hobby is! OP please come back smile

There is a chance it could be a piece of sports equipment that may help increase future earning potential. I can imagine that being a reasonable possibility in the hobby that I have on £5k.

DontmindifIdo Thu 06-Dec-12 21:28:52

OP- your DS has probably only just completed his probationary period, he wants to borrow a large sum as his first borrowing for something that they can't repossess and expect to get the bulk of the value back (as a car loan would).

Tell him to do 2 things, 1) save for it, and 2) get a credit card, but clear it every month - this will slowly build up a reliable credit history.

But in the short term,it's exciting when you first start working, make it clear he needs to save and be sensible with money, taking out a loan for a hobby thing so early on isn't being sensible. He needs to learn some money management fast.

Fakebook Thu 06-Dec-12 21:26:21

If he's on 17k and lives at home, it will take him more or less 4-5 months to save up for what he wants if it costs 5k. He should already have about 3k saved up. What else is he spending his pay on?

AnyFuckerForAMincePie Thu 06-Dec-12 21:23:40

where have you gone, OP ?

mercibucket Thu 06-Dec-12 21:23:19

Sorry to annoy, anyfucker. There's a thread about it somewhere on mumsnet. Some kind of incompatability between some blackberrys and the mumsnet app. It's the same thro the http as well. Don't worry tho, santa is bringing me a samsung tablet. The most annoying thing is the randomness. Sometimes it works and only posts once.

ErikNorseman Thu 06-Dec-12 21:20:58

That's a debt he'll be repaying for at least 5 years. Even if he could borrow it he would be mad to. The bank won't lend £5k to an 18yo with no credit history and quite rightly. FFS.

MrsHoarder Thu 06-Dec-12 21:20:27

Have you never discussed good and bad debt with him? So loans which are an investment in your future career, save on living expenses compared to the alternative etc are good debt. Still to be entered into with caution, but good debt.

Holidays, spending sprees, weddings, hobbies are bad debt: they cause you to have less money in the long run and getting into debt because you want something is how people end up in trouble.

If you aren't charging him much for housekeeping he could save £5k in under a year if he cuts leisure spending right down.

Viviennemary Thu 06-Dec-12 21:19:23

Agree that student loans are entirely different. For a start the repayments are taken directly from your salary after you earn a certain amount. So quite difficult to defect on them.

Fairylea Thu 06-Dec-12 21:16:41

Also has he looked at second hand versions of what he wants??? EBay !

Whoknowswhocares Thu 06-Dec-12 21:11:55

My motto is simple. You should never take credit for something you 'want'. If you 'need' it and can afford it then maybe, but only over the shortest time possible and not if you can make do until you have saved the money

Ergo him 'wanting' the thingy for a (obv non essential) hobby = no!
Open him a savings account.

AMumInScotland Thu 06-Dec-12 21:06:47

Several people have said "If he wanted it for a car to get to work that might be different" - I'd say a car or a student loan are an investment, which a leisure activity is not.

He'd really be better off saving towards it, as the money will then be earning interest in his savings account instead of costing him interest on a loan - so it will be completely his much sooner that way round. I know that requires patience, but learning that is an important part of growing up.

If he wants to have the option of taking out loans, then as others have said getting a good credit history is something he can work at, with regularly-paid bills in his name, and perhaps a credit card with a low limit which he pays off every month. Once they see he can be sensible with money, there will be more options on credit. but he should still think seriously about whether it's the best choice, not just because he wants everything now.

OutragedAtThePriceOfFreddos Thu 06-Dec-12 21:06:18

Why on earth would you encourage your 18yo to borrow that much money for something frivolous?

Is this a sport that he could eventually make money out of as an instructor? Is it a sport he has been doing for a while using club kit? Is he actually any good at it?

I don't think Nationwide are being unreasonable, but without the answers to those questions I can't tell if you are.

noblegiraffe Thu 06-Dec-12 20:59:43

Student loans are financially a very different kettle of fish. Also, a university education is seen as an investment. A piece of sports kit, not so much.

FamiliesShareGerms Thu 06-Dec-12 20:59:42

Misleading title, I see now it's £5k for the loan

The fact that it's a large amount of money for an 18 year old to borrow for something non-essential hasn't changed, though. If he wants it, he needs to save for it

NatashaBee Thu 06-Dec-12 20:59:26

Message withdrawn at poster's request.

whois Thu 06-Dec-12 20:57:10

Living at home he can save that up in 6 months.

The bank are not being U

McChristmasPants2012 Thu 06-Dec-12 20:53:02

hang on many students get themselves in this sort of debt with high hopes of getting a career at the end, but nobody would say to an 18 year If you want to go to uni then start saving.

i had a loan at that age, wish i didn't start loans ect but not every one is as reckless with money as i am

noblegiraffe Thu 06-Dec-12 20:50:14

Getting credit for trivial reasons (like a piece of sports equipment) has got an awful lot of people in this country into trouble.

If he wants it, he'll find a way to pay for it. Regularly saving some of his hard earned cash will be a good habit to get into.

Taking out credit the minute he wants something he can't afford would be a bad habit to get into.

Viviennemary Thu 06-Dec-12 20:40:50

I think Nationwide are absolutely right to refuse this amount of credit to an 18 year old. And if I was his mother I'd be discouraging him from taking out this huge amount as a loan. I see it's £5,000 and not £18,500. I still think he's too young for this loan and should save up half the amount and then apply again.

NumericalMum Thu 06-Dec-12 20:40:35

YABU! Could he buy it second hand, loan it or just save for a few months!
I hope I teach my DD to save before she is 18 and working...

StickEmWithThePointyEnd Thu 06-Dec-12 20:39:30

He has no credit history so they won't lend him anything. It's as simple as that really.

He needs a contract phone and a basic credit card to put normal spends on (with a direct debit to pay the full balance each month so no interest) to build his credit history up.

And while he is doing that he can save the 5k so no need for a loan anyway.

Dawndonna Thu 06-Dec-12 20:39:26

As the Mum of a bank manager, said bank manager says no way until he's been in the same employment for at least two years. He quite reasonably pointed out that there are not that many reliable jobs or 18 year olds.
He has suggested that he save and perhaps take a smaller loan when he has worked for a bit longer and saved for a bit longer.

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