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Last post 19 years ago by barryneedleman. 8 replies replies.
Things have sure changed. Banks : (
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0patience Offline
#1 Posted: Mon, Jul 12 2004, 4:07 PM EST
Joined: 07-20-2003
Posts: 1,023
My son, who is going to be 16 next week, wanted to see about getting a loan to add some equipment to his small business has has.
He has the side business of making custom auto accessories on welding and a regular job in an auto shop.
So, he filled out loan applications, I signed as a co-signer and he went into town to the banks.
After about 3 hours, he called and said none of them would talk to him at all.
They stated that since he wasn't 18, even with a co-signer, they don't loan to anyone under 18.

So, I called the bank where I have my business account and they tried to tell me the same thing. I asked how kids under 18 were supposed to buy cars. Their comment, "They aren't supposed to buy cars."
WTF??!!
I decided to talk with the manager and see what the deal was. THey went on about how kids under 18 don't have established credit. YA THINK?
After going round and round with them, they finally said to fill out an application and they would see what they could do.
The manager said he could go ahead and write me a loan check, but my son told him that wasn't what HE wanted.
He wanted to establish a loan to get his credit in line for his business.

It amazes me that all these folks complain about kids today, yet make no provisions for them to make any progress when they have the ambition.
In their eyes, all kids are lazy, dangerous and good for nothing. I guess they were hatched and went right into adulthood??

Sorry, but I just had to rant about this.
drnos Offline
#2 Posted: Mon, Jul 12 2004, 5:58 PM EST
Joined: 10-29-2003
Posts: 2,787
I'm not an attorney, but I believe the problem is that any contract with a minor is 'voidable' by the minor. What this means is that a minor can disavow the contract at any time, and the contract becomes just as if it never happened. The other party to the contract (the bank) cannot void it, the power unilaterally sits with the minor.

Now this is where I'm only guessing: If the contracting party is a minor who voids the contract, that means that the contract never existed, hence the co-signer is also relieved of responsibility and the bank is just plain out of luck.

I wouldn't lend to a minor under those circumstances.
E-Chick Offline
#3 Posted: Wed, Jul 14 2004, 9:56 AM EST
Joined: 06-15-2002
Posts: 4,877
Good for your son!

I'm thrilled to see that there are other hard working, ambitious and responsible teens out there.

My daughter at 19 is certainly one of them She's worked for the same company since she was 16. They keep promoting her to better companies within their parent company store. My 15 y.o. son close on her heals learning the family business.

Work ethics are a dying thing today. If we as parents can't instill this in our youth...we better start building more prisons.

Tell your son something that my late mom taught me..."NEVER GIVE UP...NO MATTER WHAT! IF IT'S SOMETHING YOU BELIEVE IN...IT'S WORTH GIVING IT YOUR ALL..."

A Quitter will never get the loan. Perhaps he can establish a phone, cellular phone or cable bill in his name. My daughter started building her credit with a secured credit card and now has an unsecured one...it's a start. Maybe there's a news producer out there that may be interested in your story?

Good luck buddy! We're rootin' for you!

Marla
jamie4now Offline
#4 Posted: Wed, Jul 14 2004, 2:54 PM EST
Joined: 07-05-2004
Posts: 12
It's the age. You cannot leagally sign a contract at 16. That is certainly a shame. The only alternative would be for you to get a loan and have him pay on it. It isn't at all the same thing but that's the sad part about it. Responsibility doesn't factor into it. Just like the fact that he has to pay taxes on the money he earns and on the stuff that he buys but has zero voting power or say so in the government he is supporting.

You might be able to put some money into an account and have him borrow agaist that account but I doubt even that would work.

jamie4now
RICKAMAVEN Offline
#5 Posted: Wed, Jul 14 2004, 8:08 PM EST
Joined: 10-01-2000
Posts: 33,248
if you guys would watch enough of judge judy or mathais, or whoever, the age, under 18 is the problem, not whether your son is a good risk, which i bet he is.
i couldn't make a bet with him though, a contract with a minor, undr 18, is unenforceable, unless he borrows from the mafia.

.
RICKAMAVEN Offline
#6 Posted: Wed, Jul 14 2004, 8:10 PM EST
Joined: 10-01-2000
Posts: 33,248
jamie4now

great idea. that is how my oldest, ross started his credit history.

a few years later, he did the same for his younger brother, bradley.
Cavallo Offline
#7 Posted: Thu, Jul 15 2004, 4:10 AM EST
Joined: 01-05-2004
Posts: 2,796
so how come i got a loan -- no cosigner or anything -- at the age of 16 to buy my first car? granted, it was only for $1,000, but still.

i had to go have a sit-down with the bank manager, explain to him that i had already graduated from high school and worked a full-time job making X amount of money, explain the amount of my expenses for rent, bills, etc. (i moved out on my own shortly after my 16th b-day and also had a rental lease and utilities in my name, but they were less than 1 month old).

that was a good while back, but there are kids who get loans every day to buy vehicles. sorry, but it's got to be more than the age thing. i'd shop around at other banks or, better yet, join a credit union. shoot me an email if you want to join my credit union, 0pat. it's based in boston but accessible nationwide online.
0patience Offline
#8 Posted: Thu, Jul 15 2004, 6:51 PM EST
Joined: 07-20-2003
Posts: 1,023
Well,
After going to several banks and credit unions, I had a long discussion with the manager of the bank where I have my business account.
After explaining to them that we weren't talking alot of money and he has a job, a cell phone contract in his name, which he fulfilled the one year contract on and he has almost $8,000 in equipment assests for a start up venture and maybe mentioning that if they can't take care fo my family, then maybe my accounts would all be better served at another financial institution, they finally agreed to let him fill out the application and will go over it personally.

He just turned 16 today, got his driver's license and is now making up a business proposal (I didn't even know what one was when I was 16) to take to the bank in addition to the loan application.

So, hopefully in a week or two, we'll have an answer.
barryneedleman Offline
#9 Posted: Fri, Jul 16 2004, 8:27 AM EST
Joined: 08-23-2000
Posts: 1,689
I do believe that the concern regarding someone under 16 being able to execute acontract are valid. There also may be some exceptions for emancipated minors. Also, it used to be that there were alot of community banks that would take the risk with small loans to youths within their communities even though the contracts were not binding. The bankers were members of the community and these were more character decisions rather than pure credit decisions. With the consolidation of the banking industry, this is one of the things that are being lost.
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