Experts warn of hidden risks in withdrawing money: 'Hard to get around it'
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Navigating the financial landscape can be tricky, especially when seemingly innocuous actions like withdrawing cash from an ATM can have unforeseen consequences.
For our seniors considering applying for a loan or any form of credit, it's crucial to be aware of the little-known pitfalls that could raise red flags with lenders.
Even routine transactions could impact your financial profile, making it essential to choose the right banking habits to avoid unnecessary complications.
It's a common misconception that all ATMs are created equal, whether operated by a major bank or another financial institution.
However, as Gus Gilkeson, CEO of Grow Capital, warned, withdrawing money from an ATM connected to a gambling venue can be a serious misstep with significant repercussions.
Gilkeson shared a cautionary tale about a friend who frequently used an ATM at a TAB (Totalisator Agency Board) because it was the closest one to his workplace in the CBD.
When the time came to apply for a loan, this seemingly benign habit became a glaring issue.
'It was a really bad red flag,' Gilkeson explained.
‘We had to work really hard to get around it.’
The association with a gambling venue, regardless of the actual purpose of the withdrawals, painted his friend as a high-risk applicant in the eyes of the lenders.
The problem lies in perception. Lenders scrutinising your financial history may not take the time to understand the context of your ATM withdrawals.
They see a pattern of transactions at a gambling-related location and jump to conclusions.
This can lead to outright rejection of your loan application or the imposition of stringent conditions, such as higher interest rates, to offset the perceived risk.
These red flags can also delay the loan approval process, as lenders take extra precautions before extending credit.
Gilkeson emphasised the importance of being mindful of where you withdraw money before applying for credit, as these transactions will be scrutinised.
In the case of Gilkeson's friends, they had to go to great lengths to demonstrate their creditworthiness.
This involved gathering extensive historical bank statements to demonstrate a clean gambling history.
It also required providing statutory declarations and even offering the loan assessor the opportunity to interview the applicant directly.
It was a significant effort to counteract the assumption of gambling.
Another example Gilkeson shared involved a client who faced difficulties getting a loan approved because they withdrew a large sum of cash just days before the Melbourne Cup.
The timing of the withdrawal led the lender to suspect it was for gambling purposes, even though it was unrelated to the event.
As Gilkeson puts it, such' silly mistakes' can cause big headaches for Aussies, particularly those who need quick loan approval.
The takeaway for our members here at the Seniors Discount Club is clear: be conscious of the ATMs you use, especially if you plan to apply for a loan or credit.
It's not just about the fees or the convenience; it's about how potential lenders interpret your financial behaviour.
In other news, the Australian government has recently banned the use of credit cards for online wagering to help reduce gambling-related harm.
This ban extends to credit cards linked to digital wallets and cryptocurrencies like Bitcoin, with companies facing hefty fines for non-compliance. You can read more about it here.
Have you or someone you know experienced similar issues with loan applications due to ATM withdrawals? Share your stories with us, and let's help each other navigate these financial nuances with greater awareness.
For our seniors considering applying for a loan or any form of credit, it's crucial to be aware of the little-known pitfalls that could raise red flags with lenders.
Even routine transactions could impact your financial profile, making it essential to choose the right banking habits to avoid unnecessary complications.
It's a common misconception that all ATMs are created equal, whether operated by a major bank or another financial institution.
However, as Gus Gilkeson, CEO of Grow Capital, warned, withdrawing money from an ATM connected to a gambling venue can be a serious misstep with significant repercussions.
Gilkeson shared a cautionary tale about a friend who frequently used an ATM at a TAB (Totalisator Agency Board) because it was the closest one to his workplace in the CBD.
Aussies are warned about ATM withdrawals at gambling venues, which may impact loan applications. Credit: Depositphotos
When the time came to apply for a loan, this seemingly benign habit became a glaring issue.
'It was a really bad red flag,' Gilkeson explained.
‘We had to work really hard to get around it.’
The association with a gambling venue, regardless of the actual purpose of the withdrawals, painted his friend as a high-risk applicant in the eyes of the lenders.
The problem lies in perception. Lenders scrutinising your financial history may not take the time to understand the context of your ATM withdrawals.
They see a pattern of transactions at a gambling-related location and jump to conclusions.
This can lead to outright rejection of your loan application or the imposition of stringent conditions, such as higher interest rates, to offset the perceived risk.
These red flags can also delay the loan approval process, as lenders take extra precautions before extending credit.
Gilkeson emphasised the importance of being mindful of where you withdraw money before applying for credit, as these transactions will be scrutinised.
In the case of Gilkeson's friends, they had to go to great lengths to demonstrate their creditworthiness.
This involved gathering extensive historical bank statements to demonstrate a clean gambling history.
It also required providing statutory declarations and even offering the loan assessor the opportunity to interview the applicant directly.
It was a significant effort to counteract the assumption of gambling.
Another example Gilkeson shared involved a client who faced difficulties getting a loan approved because they withdrew a large sum of cash just days before the Melbourne Cup.
The timing of the withdrawal led the lender to suspect it was for gambling purposes, even though it was unrelated to the event.
As Gilkeson puts it, such' silly mistakes' can cause big headaches for Aussies, particularly those who need quick loan approval.
The takeaway for our members here at the Seniors Discount Club is clear: be conscious of the ATMs you use, especially if you plan to apply for a loan or credit.
It's not just about the fees or the convenience; it's about how potential lenders interpret your financial behaviour.
In other news, the Australian government has recently banned the use of credit cards for online wagering to help reduce gambling-related harm.
This ban extends to credit cards linked to digital wallets and cryptocurrencies like Bitcoin, with companies facing hefty fines for non-compliance. You can read more about it here.
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