What a joke. Sdd has just called us all excited as she has been aproved for a $10,000 car loan.
And I'm supposed to be happy.
She only just got a job at a supermarket a YEAR after she left school at 16. She dropped in the other day and was complaining that she has no idea how to save money. I said, don't panic I will send you through a budget, you will save it in no time.
What bank lends $10,000 to an 18 yr old employed for 2 months, first job.
Not only that but she wants a big V6 and has to drive and hour to work each day. Small petrol bills..
The poor kid won't be able to afford the loan repayments if she has a gas guzzler, and will probably spend more than she earns on getting too and from work each day!!
That's just irresponsible that the bank would lend someone that young such a large amount of money - it's just like the sub-prime loan issue in the states - the banks can't see past their greed to the damage this does. Not only does it f*** up individual lives by lending money to people who don't have a snowball's chance in hell of paying it back, but it's going to bring about a global recession. Ar$ehole$...
wow!!! 7 years ago i couldnt get a $10K loan from a bank even though i had just been employed as a graduate recruit to the government $34K/yr at the age of 31 as i had no savings history (being a student for previous 4 years).
agghh it makes your blood boil that they do this now!
in terms of practical advice does Adult Ed in your area run any courses for young people on how to budget and save? invaluable life skills.
No Dusty I don't think there is. If there was, she wouldn't listen. She already told her father not to "rain on her parade" when he talked to her about it.
Since when has qualifiying for debt been an achievement?
How many young guys did you know that left school , got a fat new ute, crashed it three months later with nothing to show for it???
So irresponsible, and crappo to the bank. It better be a bank, not some stupid finance company.
ETA - I bet the credit card will be next - in fact I'd lay down $50 she will have a letter from the bank within a few months offering her pre frggin approval.
Banks are amazing, when you don't need it they throw credit at you, but when you really do need it they don't want to know you. Hope she learns how to manage it.
I bought a new car when I was 18 (ekk - 10 yrs ago!), I think it was around $14,500 - I was a full time uni student but worked part time. My parents actually had to go co-borrower because my work history wasn't long enough (although I easily made the repayments myself).
I'm really suprised that your DSS got that loan on her own, I would think a bank/lender would be more sensible. Guess it shows that they are all just after the $.
Wow, things sure have changed - when I was 20 and had been working for two years i couldnt' even get a $500 credit card let alone a loan. I would put good money on her getting a pre-approval for a CC.
I can't really say very much about this as i too was 18years old when i got my $10,000 approved for my first car (vp commodore). Although i must say i had been working full time since i was 16.5yrs old so i guess i had proof i could pay the money back & i actually had it paid of in less then half of the loan term so i must say i was very proud of myself for doing so.
The bank gave me a $15000 loan when I was 19 and had only been in my first full time job for a few months. I was earning less than $20k....12 years ago now.
I do believe it's crazy and probably wouldn't have done it in hindsight.
That's so unethical. They have to know that she will have a hard time paying it back but they're probably counting on that because of all the interest it will generate for them.
It really does my head in the way that banks constantly push their customers to go into debt with them. I keep getting letters offering to increase my debt, I've sent the forms back with !@#$ off written across them in large red letters but they keep nagging me.
There are days that I seriously contemplate putting all my money under my mattress and never using a bank again....
I'm curious to know WHAT BANK would give such a loan ???
Gee, when I was 19 (23yrs ago) I applied for a $3000 car loan at the CBA AND I was employed full-time for about 6mths and I had to get a much older adult (with a great credit history) to go guarantor for me (that ws so embarrassing for me) and then I had to give a "list" of assets I owned to them such as value of furniture, white goods, electrical appliances, etc...
The bank actually ws responsible in doing so and what a shame this didn't happen for your SDD !!!
... Hope all wrks out for your SDD ... And that she is able to learn how to budget !!
Last edited by smiles4u; January 20th, 2008 at 05:35 PM.
: added a bit : )
im not commenting.. just telling you my experience!
i got a $10,000 loan when i was 18, i bought a car and was paying off $195 a fortnight (i had been at my full time job 3 months...)
then when i turned 20, i went back to the same back and got a $20,000 loan (which paid out the remainder of the first loan, then left me with $13,000) i bought a new car, i was ready to sell the old car.. when i had an accident (3 days after buying the new car) and had no insurance, and had my old car still.. plus $20,000 to pay off.
ouch
in the end, the accident was deemed my fault (i still dont agree - but we went to court and all over it) and they wanted me to pay $12,000 for the other cars costs... by this time i was pregnant with Krystal and not working. my only option was bankruptcy..
please ensure she gets insurance on her car!!!! (i wish i had, i was planning to, i had all the quotes, just had to pick one!)
anyways, thats just my story. i hope your sdd doesnt go down my path!
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!!
Krystal that's a terrible thing to happen! Did you buy the 2nd car brand new? Because the car yard's usually don't let you drive away in it without having insurance, I know that was the case with my last 2 cars I bought.
$10,000 loan for an 18 year old??
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and what a shame this didn't happen for your SDD !!!
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