Loan shark

Why are the loan sharks named after sharks? What have the sharks done wrong except be portrayed on the movie Jaws as a man-eating ferocious shark with large sharp teeth to make a bloody scene.

On the other hand, you might wonder, what did those loan officers or banker or money-lender do to justify a violent ferocious role?

IMHO, I find the process of getting a loan very icky, yucky, sticky and nauseating. All right, maybe I exaggerate a little; but that's how I feel at times.

While accompanying bf to apply for a home loan, we have met with a few different characters in the process. We have seen the outcome of meeting with them for the loan application. Then we have seen the final results. These are a few things I notice.

If I were to apply for a loan, I would consider this (mind you, these are just my off-hand comments):

1. The bank itself

Is it a foreign or local bank? What kind of policies it has? For example, one bank (SC bank) gave good lending rates but insist, it is their bank policy to give 85% loan only to middle-income group. It will give you nearly 90% loan (89% loan to be exact) if you get another person to co-borrow the loan with you.
Sighh.. I'm told foreign banks are better... Can't comment much on that yet.

2. The lending rates

Obviously, I would go for the best rates with the lowest interest but, I have to take into consideration of other aspects. Eg. if the bank has hidden charges or troublesome procedure. Oh yeah, I'm looking around for a flexi-loan.
Therefore, some banks make it a hassle for you to increase your repayment even though they claim they are offering flexi-loan. Be on a look out for this! It is a nightmare... according to Ms Choo.. The particular bank (HL bank) she encountered needed her to give one month written notice to the bank before being allowed to decrease the principle of the loan by paying more.

3. The loan officers

I know you will be thinking, who cares about them? They will "service" you to fulfill their quota. Not all!! We met with a few loan officers who diligently collected the relevant documents to process the application.

For one person in particular, even after 3 months later, we received no follow-up or even a copy of the letter of offer. We even found out, that particular officer didn't even process the loan application.

How we found out? This makes another interesting story.

Since the officer didn't follow up or came back to us, we went to find another officer from another branch of the same bank (Lets call it HS bank). Recommended from a friend, this guy proves to be a hardworking person. He tried to process the application but was met with 2 stumbling block.

1. The loan was already applied by the earlier officer. So he had to cancel the earlier application before he can process the new one.

2. The records in Bank Negara showed that my friend had a large commitment (another home loan) already when this is his first property. This would affect his loan application with the higher commitment.

From the records in Bank Negara, we realised there was no application for loan from HS bank.

But the funny thing was, having a commitment (loan with SC bank) when my friend never signed any agreement yet!! We found out the loan is from one of the applications we submitted earlier.

Having a Loan without signing any agreement

Well, I confronted the officer (SC bank) to ask him how could this happen. He claimed he never process the loan since bf never signed. Anyway, he also wanted to take a look at the report from Bank Negara (making me feel like he didn't believe me).

After checking with his superior, he claimed it was the IT department fault. At the moment, there is no final outcome to his checking and I am still not pleased with his reasons.

Even though SC bank gave the best rates, but to be so bold to approve and accept your loan (either intentionally or unintentionally) without you knowing it for few months back, and now denying any fault to it, I find a bank like that VERY irresponsible. How can the officer in charge of the loan be so ignorant?

If it was not for the other officer from (HS bank) who found out this stumbling block, *touch wood* or if the loan was a forgery for someone else's loan, my friend would be in trouble!!

Banker's Response

In fact, before I made any complaint to the bank, I called an acquaintance who worked in another bank in a superior HR post. Her response to my queries were very unsettling and defensive. These are her words...

"You have to check if your bf signed an agreement already and forgot it. The bank will never approved a loan without a signature. Your bf must have done so without remembering it. Better check properly, if not you will lose face if it is your bf's fault." (She was using doubt and pride to disarm me. It worked a little because I went to check with my bf if he signed anything).

"Your bf is lucky. The loan is confirmed and ready for draw-down but no money is withdrawn." (She was making you see the little silver lining in a dark situation when the situation was not supposed to be dark in the first place!!)

"When you give your documents to the bank, you are already making a relationship and giving them permission to use your information to apply a loan." (Her response to the bank's absolute authority to use your particulars... to the extend of approving and accepting your loan? I think the latter is not true..)

I called another banking friend, her response was:

"Sometimes, these things happen, we are not sure if really there was a forgery or anything but what we can do for you is prepare a letter from the bank which states that you didn't sign any loan with us." (She was accommodating and understanding. She tried to ease the application for our other loan by stating that the bank could prepare such a letter)

Final note

Perhaps, it isn't just the loan sharks who are sharks but anyone working in the loan department who has the vicious killing drive.

If not, how can they provide "good service" to us when at the beginning of a mistake, they repeatedly deny and defend when it is obviously their fault? I thought "customers were always right". But in borrowing money, I guess, customers are the prey to the shark (bank loans or money lender)... help!