AOD FCU Denial Interesting Notes

[Anonymous]

So I applied for an auto loan and the Visa signature card. Spoke with a very nice gentleman over the last week or so and today finally got my denials. Just an FYI for future applicants, if you have significant student loan debt you will probably be denied.

They use the maximum payment when calculating those. In my case, I am on an income driven plan. The maximum payment for my loans is right at $1,000.00. My actual payment is $208 each month. Because my income driven has to be certified each year, they do not allow the use of that information and use the maximum payment possible. In my case, $1,000 is 20% of my monthly gross income by itself. I'm not sure if this is the norm but I've never encountered underwriting like that before. I just wanted to throw that out there for future applicants so they aren't caught off guard.

[recoveringfrombk7]

That's ridiculous.  Thanks for sharing though.  I gathered from reading here that student loans were a problem and so I stayed away.  I owe 177k federal, but with IDR I pay less than 500/month.  I'm not even sure what my actual payment would be.  Horrifying I'm sure haha.

Sorry about your denial, but again, thanks.

[lhcole77]

@Anonymous  This will be a really helpful post for people.

Thanks for sharing!

[Anonymous]

Thanks for the DP's!  Sorry it didn't work out  

[ZackAttack]

Glad I don't have student loans yet. Got to burn 2 529s and MET before applying for loans.

[Anonymous]

It's not ideal but I understand. I work for a bank that has some old school underwriting but they will at least recalc based on the IDR plan. I'm extremely heavy on the credit side with Sync and Navy. I have no complaints. Love them both. They've been extremely good to me. I was just looking to diversify my credit portfolio. I was actually expecting a denial based on my utilization (25ish %) or the one collection that falls off next year. I was going to still open a membership to establish a relationship. Once he told me my DTI was automatically going to be considered 20% out of the gate for the next 25 years it was pretty pointless for me to establish a relationship that I won't be able to use until I'm 55! Not going to knock AOD though. Rates are top notch. Good products. Excellent customer service. Just a little baffled by their underwriting.

[RootDet]

I am a similar experience with how they harp on student loans.  

[RootDet]

I think you should complain to the CEO of discriminatory underwriting. Because under that principle that your SL could be $1k as your not longer eligible for IBR, well under that same situation, you also, In theory, could be making $200k/yr. If they are going to do assumption based lending criteria for facts not in evidence, then they should go all the way. 

Not that you also have to tell us, but is a straight 10/30 year loan payment higher the arbitrary 20% income number they came up with?

[Credit4Growth]

👍@Anonymous and @RootDet 

Thank you for sharing info & your thoughts!  It is Very helpful to me!!

🤔 Please help out to understand the maximum payment when calculating for student loans so that I may have better view of the perception on DTI...

I sorry to hear about the denials.

[recoveringfrombk7]

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@Credit4Growth wrote:

👍@Anonymous and @RootDet 

Thank you for sharing info & your thoughts!  It is Very helpful to me!!

🤔 Please help out to understand the maximum payment when calculating for student loans so that I may have better view of the perception on DTI...

I sorry to hear about the denials.

---

@Credit4Growth 

If you go to studentaid.gov you can actually login and see your federal student loans and the total monthly payment across all of the various plans available.  OP is saying AOD are not using what is paid every month on an income-based plan, but instead what the payment would be under the Standard Plan, which is significantly higher in order to calculate DTI.