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  • Revolving Credit

    Hey
    Are the banks fussy about what you are using a revolving credit for? Currently trying to get a RC and have enough equity however the bank want to know why I want it.

    Any pointers would be appreciated.

    Dickie
    Dickie

  • #2
    Just say you want to go on an overseas trip to Cancun for a well deserved break!

    Seriously, just tell them it is for contingencies for running the business, its good to have a buffer in case of vacancies, unforeseen maintenance, non payment of rent.

    As long as you can cover the repayments what would be the banks problem? They have you by the balls anyway with your equity!
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

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    • #3
      I was asking for $350k so that's quite a bit to explain. they just seemed quite niggly over the use of money. Not come up against that before.
      Dickie

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      • #4
        Originally posted by dickie View Post
        Hey
        Are the banks fussy about what you are using a revolving credit for? Currently trying to get a RC and have enough equity however the bank want to know why I want it.

        Any pointers would be appreciated.

        Dickie
        I am in the process of leaving ASB because they refused me a RC facility of 80K, which ended up costing me a solid 280K over lockdown - I have a 60% LVR and the 280K was the lost profits on an opportunity I took up on a much lower input than the total 80K.

        They also refused to discount advertised mortgage rates on lending once my rates had come off fixed.

        I do share investments and property with them. Share trading is generally OK but their mortgages are much on par with ANZ who the mortgages were with earlier.

        Westpac were comfortable lending to me and have given me much more than 80K, on a better interest rate than ASB would offer me. They dared me to find a better deal and that has now happened.

        I challenge you to find a bank that won't treat you for any less than you are worth and provided your reason is fair and planned, give you what you are asking for.

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        • #5
          Originally posted by absoluteproperty View Post
          I am in the process of leaving ASB because they refused me a RC facility of 80K, which ended up costing me a solid 280K over lockdown - I have a 60% LVR and the 280K was the lost profits on an opportunity I took up on a much lower input than the total 80K.

          They also refused to discount advertised mortgage rates on lending once my rates had come off fixed.

          I do share investments and property with them. Share trading is generally OK but their mortgages are much on par with ANZ who the mortgages were with earlier.

          Westpac were comfortable lending to me and have given me much more than 80K, on a better interest rate than ASB would offer me. They dared me to find a better deal and that has now happened.

          I challenge you to find a bank that won't treat you for any less than you are worth and provided your reason is fair and planned, give you what you are asking for.
          Had very similar experience with ASB earlier this year and also moved to Westpac who were happy to get a new customer.

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          • #6
            It would be irresponsible of a bank to give you $350k without asking why. Don't you think? What if you're borrowing for something illegal - bribing someone, traffic drugs, pay a ransom, etc?
            Or worse, what if you're mentally unstable after a major surgery or distressing life incident, and want the money to buy a unicorn? You'd want the bank to at least ask the question to possibly protect you from that, wouldn't you?

            On the other hand, they don't actually check. If you're comfortable lying to a bank, tell them it's for renovations.
            AAT Accounting Services - Property Specialist - [email protected]
            Fixed price fees and quick knowledgeable service for property investors & traders!

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            • #7
              The bank has the security for the loan - i.e. your properties, and you're a guarantor for it. They'd not forward the loan to you without making sure you can afford it - so they're collecting customer data. However you wouldn't risk saying it was for something other than property as it would raise a red flag and you'd lose it.

              cheers,
              Donna
              Last edited by donna; 10-10-2020, 11:41 AM.
              SEARCH PropertyTalk, About PropertyTalk

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              • #8
                Originally posted by Anthonyacat View Post
                On the other hand, they don't actually check. If you're comfortable lying to a bank, tell them it's for renovations.
                They confirmed quotes etc would be required.
                I also had some business expenses due and they basically said if you have the cash you should pay them with that (which they could see as I banked with them)

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                • #9
                  Wow they want quotes I guess they're on high alert that RLOC are being used for to pay off business debt, keep businesses afloat etc. Spread the risk and get your RLOC with another bank.

                  Have you seen this discussion? Also see 'similar threads' for more of the same. In the link I've attached it has a good reply re. ASB

                  cheers,

                  Donna
                  Last edited by donna; 10-10-2020, 11:48 AM.
                  SEARCH PropertyTalk, About PropertyTalk

                  BusinessBlogs - the best business articles are found here

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                  • #10
                    I wonder if it's a wide strategy.

                    Basically the reserve bank is in damage control mode.

                    Where as the general public are in piggy piggy scoff mode.

                    The RBNZ needs to get that 100 billion dollars (they just injected into the economy) going where it does the most good.

                    But the piggywiggs want their cake and eat it too.

                    So, possibly, the banks are trying to get the cash flowing rather than stowing.

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