We have just been approved for a home loan with ANZ but their minimum time of working is only 3 months. I thought the minimum was 12 months for all banks? I think its rediculous they can just give give out loans like that.
I got a credit card ridiculously easily when I was 18. I had only been at my job (full time) for about 4 months. I had some savings though so maybe thats why they gve it to me. I also got a mortgage at 20 and I wasnt even working in a permnent job. I did go into the mortgage with someone else though...
but yeah, it is sad that banks hand out money so easily sometimes.
Does you SDD work full or part time?? I hope for her sake she is able to repay it. I hate to think how much patrol is going to cost for a big car like that.
I had my first mortgage when i was 18. I wouldnt worry - it will probably teach her so much about the ways of the world.
As long as she proved that she has the 35% earnings to debt ratio, she would have gotten the loan no prob. banks are so lame with stuff like that, they give out loans to anyone basically, even if they have only been employed for 2 months!
But seriously, i think this will teach her some responsibilities. And if she screws up, its a great lesson in life!
Home loans are different - they can take the house off you...
A GF of mine was given a credit card at 18 and on the pension. They don't care and target those with little knowledge or education.
I'm pretty sure it was Bendigo Bank.
Is it not a secured loan? You will probably find that the bank will put a bill of sale over the vehicle - then they can reposess it if the loan defaults. And, she will have to have full insurance as a clause of the bill of sale - has she looked into how much her premiums will be for a V6??
Once she gets the quotes, she will probably change her mind as to what type of car it is!!!!
Yes, her grandad rang the bank to see if she needed a garantuor (how the hell do you spell that??), the bank said no, they just take the car.
So she will have income insurance as well, but she can't have done too much homework as she wants a VT (why she can't get a schmick little Lancer is beyond me). They go for about $8-10k, the insurance would be at least $1500.
For some reason she says she is going to put $2000 straight back on the loan. WTF? Why not just borrow $8k?? Even that's a lot.
Well anyway, is you know my IL and have seen the Lulu the Biploar bear series you would know that ALLLL the IL's have already called her and hassled her already. She laughed at her dad when he called and said - Lulu told you to say this didn't she! haha ha .
So all I'll do from here is show her how to budget realistically. She's a good kid, she is doing pretty well at work already, I'm sure she can handle it but its a big debt to have over your head for 5 years...
Honestly lulu, i think its great taht she is showing initiative do get herself something rather than just wasting all her pay, IYKWIM??
You can probably help her to set up a "second" fee free account, and split her pay so that the money for the loan and the insurance goes straight in there and then just gets direct debited, so its as if she never saw the money. And dont linkit to her ATM card
She'll be cool
Didn't she need a guarantor????? I tried to get a $5000 loan for a car at 18 and needed a guarantor, and I was working two stable jobs for a year!!!!! Go figure!
ETA: dunno how I missed a whole second page of posts...!
I do have one tip for you to tell your Sdd (if you haven't already)... get her to put a little aside each week for back up, just is case something happens, gets sick or loses her job, and she can't pay one or two weeks on the loan. Just a bit of insurance!
Last edited by Indadhanu; January 21st, 2008 at 08:10 AM.
Personally I think that is frightening at that age. I think its scary how quickly and easily people can be loaned money through loans, credit cards and higher purchase these days.
The day I was 18 I had all the papers ready to sign for our home loan. We built a house and for the first part we went really well. But we had no idea how to manage money and refinanced so many times in such a short period it wasn't funny. We had parents guiding us as well but hey, as if we were going to listen to them!
It taught me a massive lesson and I'm sure your SDD will learn as she handles it all. Def provide her with all the tools she will need to budget etc. As for her buying a big car that frustrates me lol as its not a smart decision. But again its her choice. Good luck to her!
It's terribly irresponsible of the bank to loan her the money with so little work experience behind her.
I got a $5,000 loan at 19 no problems from CBA, but had been working for almost 12 mths at the same place and had been working previously part-time as well. Unfortunately, about 12 mths after buying the car I too had an accident and bye-bye car (thankfully not me, since it was a really bad accident). And no insurance. So I had to repay the loan for another two years without anything to show for it...
Maybe sit down with her and 'help' her research cost of ownership of cars. NRMA website has a function where you can look up this kind of thing (perhaps the V6's lack of a green rating might help if she's at all concerned about the environment?). And make sure she understands how important full comprehensive insurance is, at least until the loan is repaid. With the cost of that for her age and the type of car she's considering it might help your cause.
I suppose it's each to their own and how responsible a person is? I myself got a 30k car loan and morgage at 18. I only needed a guarantor for the morgage but I suppose I was earning more than the average 18 year old.
I hope she is responsible with the loan for her own sake
i think it is stupid i went for a 5k loan to pay for wedding stuff a few months ago and i have been in a full time job since i left skool. i have been doing daycare for the last 2 yrs but because i am self employed they wont give me a loan it is so stupid. i am not technically self employed because i get payslips and everything from my employer. i make more the dp a week yet he got a 35k loan for a car. oh and if we tried to get the loan for the car together he couldnt get 1cent off them but if i went off it he got the full 35k easy.
I work in lending and am shocked that someone without a good savings history was able to get a loan. at that age we would require evidence of savings 12 months continuous employment, 20% deposit towards the purchase price of the vehicle.
What I would suggest, is that if nothing else get her to do some research about the cost of insurance before she gets her car. if it is a loan secured by the vehicle they will most likely require her to have full comprehensive cover. Which is either near impossible for an 18 year old with a V6 or very very expensive, and I'm talking over $1000 per year!! to protect her also insist that either the bank or she privatley checks with Vic Roads to make sure the car isn't stolen.
Before siging anything she should ask them if there are any penalties for paying the loan out early.
There is also loan protection insurance and while it can increas how much you have to pay back, it can also cover you for involuntary unemployment (redundancy) and dissability (unable to work due to injury).
If she doesn't have the car yet, she probably hasn't signed any contracts. Ask her if you can go with her when she signs the contracts, she might not let you but it's worth a try and at least then you could check up on the bank or finance company that is giving her the funds.
I really hope it's not one of those companies either I think places like motor finnce wizzard are evil!!
insurance for an under 25 driver is very expensive - more than $1,000 a year (add on more for that if the vehicle is under finance) - heck our FPV alone insured by one of the larger ones was $2,000 a year and that was with both drivers over the age of 25 (and they cancelled all our policies when I notified them of a modification to my car) - now we're with Shannons and the 5 cars (3 imports - 2 american & 1 japanese; 1 performance vehicle and 1 highly modified "normal" car) was about $2,000 a year (2 insured to race & 1 a weekend only driver), now that we've sold the FPV our insurance has dropped by $900 a year.
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that frustrates me lol as its not a smart decision. But again its her choice. Good luck to her!
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