When Phyllis Fahey, a 70-year-old from Rathfarnham, Co Dublin, decided to trade in her old car for a new Ford Fiesta in 2005, she quickly hit a road bump. When she went to Ulster Bank to request a car loan, she was turned down, despite having been a customer for more than a decade and having more than enough money on deposit to cover the €145 monthly repayments.

To her horror, Fahey was told explicitly by a bank official that she had been turned down because it was bank policy not to give loans to applicants over the age of 65. Indignant, she took a case against the bank under the Equal Status Act. The case was heard in 2008 and Fahey won, leaving Ulster Bank red-faced and with a €2,000 fine to pay.

End of the road for financial ageism
At the time of the Equality Tribunal's decision, Niall Crowley, the chief executive officer of the Equality Authority, said, “Age limits are a significant barrier to the participation of older people in employment and to their access to a range of services including those of financial institutions”. He went on to point out that 33 of the Equality Authority's 328 case files in 2007 – almost 10 per cent – involved allegations of discrimination by financial institutions on age grounds.

“The problem of older people having difficulties getting loans predates the recession,” said Gerry Scully of Age Action Ireland. “It's an insurance issue. A lot of underwriters are reluctant to underwrite loans to older people. It is a form of discrimination if it happens because they are old rather than being based on their income or their means.”

The Fahey case made it clear, however, that financial institutions cannot turn down loan applicants on the basis of age alone.

What the banks say now
Now those institutions are adamant that an applicant's age holds no relevance once they meet the standard lending requirements. "Lending criteria for all customers are based on affordability and repayment capacity along with other factors such as income, behaviour with existing borrowings, and so on,” said Ronan Sheridan, a spokesperson for AIB. “Our criteria are irrespective of age and there are no additional conditions for customers over 55 years old.”

Nicola O'Sullivan, a spokesperson for Halifax, said the only age restriction it applies to its personal loan customers is that they must be over the age of 18. “There are three key factors that are evaluated for all personal loan applicants: affordability, ability to repay over the term of the loan and credit history,” she said. “Any applicant looking to take out a personal loan should consider these factors in advance of submitting their application.”

What you need to do
Usually, if you are applying for a loan, the banks require you to have a certain minimum income. Bank of Ireland, for example, requires loan applicants to have a minimum annual income of €15,000. If your income from pensions, investments and any work you do does not reach this level, you will be required to demonstrate your capacity to repay the loan in other ways, for example, from money you hold on deposit.

Bear in mind, the lending institution will check your credit rating to make sure that you have consistently made other payments, for example, credit card repayments. You can request a copy of your own credit report from the Irish Credit Bureau (www.icb.ie, 01 2600388) for a fee of €6.

If you have no previous banking history with the institution concerned, you will need to provide additional information. "Customers who do not bank with AIB need to provide us with six months' bank statements,” said Sheridan. “Personal loans are typically applied for by existing customers, however, so no additional information is usually required."

If you are thinking of applying for a personal loan, as with any financial product, be sure to take the time to shop around and compare rates in order to get the best deal. A difference of a percentage point or two in the APR could save you hundreds of euro in interest on your loan. The Financial Regulator publishes regular cost comparisons of loans and credit cards, and also provides a loan calculator on its website (www.itsyourmoney.ie).

Helpful links
Equality Authority – www.equality.ie  
Financial Regulator – www.itsyourmoney.ie
Age Action Ireland – www.ageaction.ie