Can an 18 year old who has been working and saving up since 13 and is now on his own, get a small bank loan? from 13 to 15, he worked for his older brother's contracting business. He got a work permit and began working after school at a hardware store. after he graduates, he starts working full time. he gets a second job working 3 nights a week as a cashier at a gas station. He wants to move out of a not so ideal living situation. Story takes place in the early 2000s (boy, was it super nostalgic to write about razer flip phones and KB Toys ) Is this feasible?
Not an expert, but I think it would be difficult. Though eligible at 18, the kid would have to be independent of his parents (not claimed as a tax dependent), have an established credit score (a track record for paying off bills and other loans/financing), and some kind of earning history, all of which I imagine would take a bit of time. Maybe only another year or two. His savings wouldn't matter much (unless applied to a down payment on a house or other investment) because loans are all about assuring banks that they'll be able to get their money back in the future. That means a stable job, a history of stable jobs, clean tax records, some track record for paying off previously incurred debt (usually credit cards). Now, there's a huuuuge difference between a loan and financing. A loan is a lump sum of cash. Those are hard to get and are usually applied to a house, business, or something tangible. The bank wants their money back. They're going to need a good reason before they give it to you. But any 18 year old can get a credit or a high interest car loan if they have a job. Like the commercial says, You're job is your credit! If you make $300 a week, then...." Banks love to stick teenagers and college kids with credit cards because they know they'll fuck them up. That's how they make their money. 19% is highway robbery, and it explicitly targets demographics unlikely to pay it back. A loan is an investment on future successes. Credit is a gamble on future failure. Banks do have personal loans, but I don't know anything about them. If you have a bank account you're always eligible for some kind of personal loan. It's usually part of the trim package when you select what kind of bank account to open. So if the kid has a job and a bank account he can probably get his hands on some cash. But.... ...if the story were present day, I would say any dope can get a credit card with a sizeable cash advance ceiling at suicidal interest rates. Like 20%ish as opposed to a 3-4% from a bank. Not sure about 15 years ago, but that was before the housing crisis when sub-prime loans were at their heyday, so who knows? Bottom line, I think if an 18 year old kid needed money, he wouldn't have the credit or work history to go to the bank yet, but would have no problem signing up for a few credit cards with cash advances.
He could if someone acts as a guarantor for him (I think in the US, this is referred to as co-signing for a loan).
In Ireland in the early 2000's, banks sent sample cheques as enticements for people to apply for loans. That won't end badly! An 18 year old might have required a guarantor, though, or some kind of collateral.
In England, ok so not the same country, I got a bank loan to buy a house. At the time you needed to be over 21 and married to get a mortgage from a building society. It was a very cheap house, the bank insisted I rase 50% of the asking price. So it was a low-risk loan to them. The house was a good asset they could sell if needed. I actually left home when I was 15. It is a problem for someone, so young to make their own way. Employers want to pay a low wage, but supermarkets don't give a discount because your young. You need to be self-employed and charge the going rate. So income is a factor as well
If it's a small bank, perhaps in a small town or one where his family has a history of doing banking, a loan officer may have discretion to give the kid a loan if she believes the kid will be able to pay it back.
Depends. Why does he need a loan if he's been working and saving through his teenage years? Is it to get an apartment or place to live? That's not hard if he has money and a job. Does he need a car? Not hard if you have money and a job. What's the context?
For a place to live. First and last months rent and security deposit (assuming renting from a landlord is the same as an apartment complex). I don't think its realistic for an 18 year old to have that amount upfront in addition to enough saved to continue to make rent each month. I was thinking the loan would be for these things so his savings isnt depleted right off the bat. I want him to struggle with these hard choices... But not suffer lol
Okay. If it were the official first/last/security, that might be an issue. Plenty of shady landlords with illegal apartments that accept cash to keep the income off the books. Depends on where the kid lives, though. Small town would be more difficult than a city or a college town, which are loaded with apartments. The acquisition of money is an easy sell as far as struggling goes. Shouldn't be too hard to pull that off.
Kid has a deadbeat mom, so he lives with his grandmother who has essentially raised him and his younger brother and has been taking care of her other grandkids in a small 2 bedroom home thats falling apart (the grandma has a room, and the other kids share the other room). He loves his grandma, but she has a temper and he knows he cant continue to live there like that. Especially since hes now 18, completed high school, and is legally an adult. So he decides to strike out on his own, and his grandma basically says "ok bye, dont ask me for money"
That would be the avenue I would pursue. Small, locally owned banks have far more leeway in determining who gets loans and who doesn't. Perhaps he did the loan officer a favor during the course of his work and demonstrates his trustworthiness. That loan officer might take a chance on him for a small loan which, if repaid promptly, would result in a bigger loan later on.
Strictly realistically speaking, I doubt it. He's considered a financial liability. How's he supposed to back an unsecured loan up? With what or whom? How is he supposed to pay his high interest rates? The bank (the lender), before lending him any money will check his assets and the question is, are they at least equivalent to the sum of the loan plus interest? Even if they are, it's considered a gamble. They usually feel more assured to hand a loan if the financial equivalent of his assets is much higher, thus a safe transaction between both of them can be made. So, does he own anything (ex: a car) that can back him up? Does his guarantor own anything?
