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Where can I get a graduate loan before starting work?

Last post Sun, Jul 29 2007, 6:19 PM by thh678. 9 replies.
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  •  Fri, Jul 06 2007, 5:24 PM

    Where can I get a graduate loan before starting work?

    I'm a recent graduate and have a firm job offer with a confirmed salary, starting at the beginning of August. I need to cover the cost of a car and have a little extra for the first months rent and deposit - I'd like to borrow about £7000 over 5 years (to keep the monthly repayment down).

    - I currently live with my parents, but need to move house for work. Obviously, I'm going to rent, not buy.
    - My parents have lived in the same house for all of my life, but I've moved house many, many times in the last 4 years (such is student life)
    - I have a good credit rating - I've never had a late payment on a credit card and my overdraft is within its limit. The only bad thing is that I applied online for a loan from HSBC (who I have my current account with) and was rejected. Forunately this was the only loan I've applied for. No CCJs, defaulted accounts, etc.. 

    I can prove my salary with letters from the company (a healthy £25,000, so I'll have no problem with repayments) but since I haven't started work yet I'm worried that I'll get rejected by most banks. Does anyone have any advice about companies that are sympathetic to my position?

    The obvious answer is to go into my local HSBC branch and explain the situation to them, but I'm worried that I'll end up talking to an idiot and get rejected again (another black spot on my credit record). It seems that a lot of so-called "graduate loans" are for graduates who've already started work -- but I need the money in order to start work!

     

    • Post Points: 20
  •  Sat, Jul 07 2007, 4:21 PM

    Re: Where can I get a graduate loan before starting work?

    An update in case someone reads this and is in the same situation:

     

    I went into branch of HSBC and discussed my situation with them. Apparently if you have a firm offer of a job and can show them a letter stating your salary and start date then they're happy to lend you the money (I'm lucky to have a good credit record I suppose). They arranged the loan there and then: £7000 at 9.8% APR for 5 years. I must also give them big kudos for not trying to sell me PPI. It would have been an extra £35 a month!!!!

    Through the years I've heard some very bad things about HSBC, but I have to say that their customer service is so good compared to other banks that they'll keep my custom for plenty of time yet!

    Time to go house/car shopping :-)
     

    • Post Points: 50
  •  Mon, Jul 09 2007, 11:28 AM

    Re: Where can I get a graduate loan before starting work?

    Thanks for updating.

    And congrats on your job with it's lovely healthy salary, too - impressive for a graduate, isn't it?  Nice one!

    Cat

    • Post Points: 5
  •  Wed, Jul 25 2007, 1:19 PM

    Re: Where can I get a graduate loan before starting work?

    So you can actually get a graduate loan out before getting your first wage slip? They already have my job confirmation when I opened the account. Do you have to have an account with the bank for a certain amount of years. I also have an graduate account overdraft with them which is maxed out at £1,500 do you think that this will have any effect. Incidently what are the repaymounts amounts per month on the loan just to get a rough idea?
    • Post Points: 20
  •  Wed, Jul 25 2007, 1:46 PM

    Re: Where can I get a graduate loan before starting work?

    wjat exactly can you use the graduate loan for, are you limited?
    • Post Points: 5
  •  Wed, Jul 25 2007, 2:11 PM

    Re: Where can I get a graduate loan before starting work?

    Yes, they had no problem with me getting a graduate loan without a wage slip - though they did insist on seeing my confirmation with a statement of my salary. I've been with them since I started university 4 years ago, so while that may have helped they only seemed interested in the fact that I held a graduate account with them.

    About the overdraft -- well, I guess it depends on what you mean by maxed out. If you've gone over the authorised amount freqeuntly then that'll count against you I think (maks sense, but I'm not sure) - I haven't done that but I've consistently been over £1000 overdrawn (my limit is £1750). I think they expect that from a recent graduate, so it won't count against you.

    I took a long loan to keep the repayments down - over 5 years my monthly repayment is £145.92. I also took a 2 month repayment holiday, making the total I pay back £8755.

    I think it's mostly based on the question "can you afford this loan?". I had to tell them all of my monthly outgoings, for example rent, car insurance, council tax, travel expenses -- that sort of thing. It's worth thinking about this beforehand so you can pick a repayment term that they'll deem "affordable".

    No restrictions on what you can use it for - mine was half for a car, some for deposit and first months rent, and some for furnishings. She ticked "other", and it didn't seem to make any difference. If it's for something specific though it's probably worth telling them - nothing to lose and you might get a better rate.

    Oh, one last thing, don't use their online application system - it'll reject your start-of-employement date as you haven't started yet and then reject you because you're "unemployed". But if you've already tried that, again don't worry. The first thing that came up on her screen was "rejected for loan", but I explained the situation and it didn't matter. Might have affected my credit rating though, so never a good idea.

    Hope that answers your questions!

     

    • Post Points: 35
  •  Wed, Jul 25 2007, 2:51 PM

    Re: Where can I get a graduate loan before starting work?

    i got a graduate loan thru  barclays at 7.7%, i actually used it to pay off a career development loan (a loan where the government covers the first yr of interest that is charged at 7.9% while you finish ur course, on completion the rate goes to 12.9%) saved me over £500. bit naughty cos the terms state you can't use it for that purpose. had to fill in a similar form. they told me that it's not a proper credit score that they do, they check the history of the account etc and i've been within my terms of my overdraft for yrs!
    • Post Points: 20
  •  Sun, Jul 29 2007, 2:40 PM

    Re: Where can I get a graduate loan before starting work?

    how much was the loan you got to pay off your graduate loan also are you in employment or do you simply have confirmation of employment?

    • Post Points: 5
  •  Sun, Jul 29 2007, 3:05 PM

    Re: Where can I get a graduate loan before starting work?

    How much was the loan you took out over 5 years and was it with HSBC? By maxed out I mean that my account was at the authorised overdraft limit of £1500 never over. I have had the account for 5 months but have a clean credit record as of yet. I am thinking of borrowing £15k over 5 years. However I am thinking is it better to borrow say eg. £10k see if i pass credit scoring and then proceed to get extra amount as they are more likely to pass me on a lower amount than a greater amount ( I could then proceed to consolidate the 2 loans)? Also they have confirmation of employment which was given when I opened my account back in March however I have been doing training etc since then, but I am now qualified to earn an income with the company, so would it still show online as 'rejected for loan'. What is the process if you are rejected what did you have to explain? If I am rejected do you think that they will allow me to apply for a lower amount? Do you think I should apply online or by phone or in branch and if I apply online will they automatically realise that I am wanting to apply for a graduate loan as I cannot see 'graduate loan' on site it just says personal loan?
    • Post Points: 5
  •  Sun, Jul 29 2007, 6:19 PM

    Re: Where can I get a graduate loan before starting work?

    isa484

    Getting a loan when you have no credit record is not always easy although your own bank should be able to accomodate you assuming you can afford the repayments.

    there are firms that specialise in giving credit to people with poor credit ratings - Welcom Finance and Premier Blue Loans are two that I'm aware of:

    www.welcomfinance.uk.com
    www.premierblueloans.com

    Hope that helps.
    • Post Points: 5