Personal Finance

Anyone have experience with banks that don't look at TDS?

  • Last Updated:
  • Jul 23rd, 2020 12:20 am
[OP]
Member
Nov 15, 2017
369 posts
133 upvotes
Canada

Anyone have experience with banks that don't look at TDS?

So I make $75K/y give or take on BONUS... everything was going for awhile concerning getting approved til I hit a roadblock from various banks..

Come to find out, only one bank after talking to them for 30 minutes literally revealed why the denied happened. Apparently im at %45 TDS Mortgage/Loans only w/ 0% credit card debt. If you have "%55" of income left, why are banks denying you? Sure, maybe because it becomes high risk that you cannot pay back..

In any case, does anyone have experience at banks/dealers who don't look at the TDS or, allow more then "45%" TDS? I am trying to get SXS ATV thats $40K, I have $7500 cash for down which leaves $32,500.00 to pay off.. at 5y loan on their "2.99%" is about a $550-600/month loan which I can definitely afford "Extra".

TD, RBC, DESJARDINS, CIBC all have been hit during this ordeal w/ no approval. I understand this covid thing is around, but I haven't dropped a beat w/ work.
39 replies
Deal Addict
Jan 1, 2017
1811 posts
1831 upvotes
You are trying to buy an ATV that costs more than a car and is more than half of your annual salary? YOLO!
Deal Fanatic
Apr 5, 2016
5939 posts
4382 upvotes
Calgary/Vancouver
TDSR is a main component of all lending. No way around it. If you're spending above 45% TDS, Then you're living above your means. When calculating TDS, we're not even taking your food costs, insurances, cell phone bills, etc.

If you really want to do it, then try the dealer's auto financing arm. Easier approval with collateral.
Deal Guru
Dec 5, 2006
13058 posts
8303 upvotes
Markham
bomber17 wrote: TDSR is a main component of all lending. No way around it. If you're spending above 45% TDS, Then you're living above your means. When calculating TDS, we're not even taking your food costs, insurances, cell phone bills, etc.

If you really want to do it, then try the dealer's auto financing arm. Easier approval with collateral.
I agree with you that one shouldn't live above means

One issue with tds/gds is that it calculates based on annual income without considering other assets. For example, if one's annual income is 75k but have 100,000 in saving account, then tds alone won't make right decision
Deal Addict
Jan 1, 2017
1811 posts
1831 upvotes
smartie wrote: I agree with you that one shouldn't live above means

One issue with tds/gds is that it calculates based on annual income without considering other assets. For example, if one's annual income is 75k but have 100,000 in saving account, then tds alone won't make right decision
Use the assets to buy then...
Deal Guru
Dec 5, 2006
13058 posts
8303 upvotes
Markham
ProductGuy wrote: Use the assets to buy then...
Sure. I know you use all cash bought your house and never use credit card to pay your spending. You don't have lending products, sound great
Deal Fanatic
Apr 5, 2016
5939 posts
4382 upvotes
Calgary/Vancouver
smartie wrote: I agree with you that one shouldn't live above means

One issue with tds/gds is that it calculates based on annual income without considering other assets. For example, if one's annual income is 75k but have 100,000 in saving account, then tds alone won't make right decision
For my applications, I can use cash assets as income. I can take 4% as income but $100,000 not gonna matter much as it's only $4000 annual.

Also, it's harder to replace assets if you have to use it to service a debt. If you lose a job, it's easier to find another one with similar income.
Deal Addict
Jan 1, 2017
1811 posts
1831 upvotes
smartie wrote: Sure. I know you use all cash bought your house and never use credit card to pay your spending. You don't have lending products, sound great
All I am saying is use part of your assets to decrease the amount of debt you need to take on so the serviceable debt percentage meets the ratio not for everything in cash.
Deal Addict
Feb 4, 2019
2687 posts
4373 upvotes
BC
The bank you are looking for is called Piggy Bank.
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
smartie wrote: I agree with you that one shouldn't live above means

One issue with tds/gds is that it calculates based on annual income without considering other assets. For example, if one's annual income is 75k but have 100,000 in saving account, then tds alone won't make right decision
You need to look up the meaning of what TDSR/GDSR means.

Assets (non dividend) for the most part do not supply the applicant with an income. Key operative word is "income"

TDSR/GDSR's core requirement refers to ongoing and termed capacity and serviceability. Plain and simple.
Has nothing to do with equity in property, paper value of stocks, or million dollars elsewhere.
Last edited by mikeymike1 on Jul 21st, 2020 4:24 pm, edited 1 time in total.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Fanatic
Jan 15, 2017
5232 posts
5273 upvotes
Ottawa
Every lender will look at TDS. It's your Total Debt Service. There isn't any lender going to lend to you without considering exactly how much you owe in total to your income. It's how they determine whether or not you are in a position to pay them back.

There are B lenders that will go beyond the 45% rule. These loans will come at a cost though of higher interest rates.
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
Tigress2017 wrote: So I make $75K/y give or take on BONUS... everything was going for awhile concerning getting approved til I hit a roadblock from various banks..

Apparently im at %45 TDS Mortgage/Loans only w/ 0% credit card debt. If you have "%55" of income left, why are banks denying you?

I am trying to get SXS ATV thats $40K, I have $7500 cash for down which leaves $32,500.00 to pay off.. at 5y loan on their "2.99%" is about a $550-600/month loan

TD, RBC, DESJARDINS, CIBC all have been hit during this ordeal w/ no approval.
Let me share a little inside tip as well. Majority if not all lenders including us will not only calc your tdsr pre app but will do so post app too.
With this said, if your tdsr is now at 45% go ahead and add that $550-600/mth serviceability and calc what your tdsr be then? Hard denials/declines will follow.

If you were to say buy a used ATV that when termed calculated to a $200/mth approx etc serviceability then maybe there may be some consideration from some lenders.

Another hint. Most ATV lending institutions will term loans up to 10, 15 even 20 years. Not to say you have to or want to commit to overextended terms but term consideration may shoe-horn you into that ATV you want.
(Atv lending (sometimes named Powersports lending) is an actual credit product that some major banks offer. It is not always securred collateral lending like how auto is, thus why extended terming)
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
[OP]
Member
Nov 15, 2017
369 posts
133 upvotes
Canada
mikeymike1 wrote: Let me share a little inside tip as well. Majority if not all lenders including us will not only calc your tdsr pre app but will do so post app too.
With this said, if your tdsr is now at 45% go ahead and add that $550-600/mth serviceability and calc what your tdsr be then? Hard denials/declines will follow.

If you were to say buy a used ATV that when termed calculated to a $200/mth approx etc serviceability then maybe there may be some consideration from some lenders.

Another hint. Most ATV lending institutions will term loans up to 10, 15 even 20 years. Not to say you have to or want to commit to overextended terms but term consideration may shoe-horn you into that ATV you want.
(Atv lending (sometimes named Powersports lending) is an actual credit product that some major banks offer. It is not always securred collateral lending like how auto is, thus why extended terming)
What they aren't including in my total income is the fact my work pays for my cell phone, tv, internet, insurance, gas. I literally have nearly free cash flow for that month which I literally pretty much throw back into my loans and keep enough for food and all.

Maybe, im too privileged or my thought process is too privileged that its something I want now instead of 2 years down to road which by that time I could straight out pay that bike if I focus on it or pretty damn close to it.

As for the 10/20 year loan term, was never an option brought to the table which I would definitely take.

I could move my vehicle to my house but then would go from a 0.99% term to %2.74 + 2nd mortgage

I could refinance the vehicle and slash maybe 10-15% TDSR I have a really good relationship with this bank. They clear $5000 from a cheque for me without waiting for it to be deposited officially from another bank. I don't even have overdraft plan with them. I've deposited cheques work gave me and the 5K would release, while the remainder would take 5 days.

I can try those "B Lenders" that won't look at the TDSR, I wouldnt mind a 7-9% loan, but I will not touch a 19% one on 30K + Fees ill end up owing like 400 bucks to finance monthly w/ little going towards principal.

#YOLO to the fullest extent.... but I am not crazy to want what I want if I can pay it.

Ill ask the dealer to hit me w/ a B lender out there and we will see, but im not interested in 20% loans.

Smartie brings up the exact point why im asking this very question.. banks don't account for anything other then your "Proved" income vs assets that balance you out beyond that income. Again I mention my work covers all those little itty gritty bills banks probably consider that will slash into your spending and don't want to take the risks.

I have a $22K TFSA Stock valued account.. while mentioned to the dealer.. was no where shown on paperwork since it's not income or an item to use..

I have CLEARED, 2 sleds (modern), newer boat.. collateral doesn't even exists.. when you say can you lien on them, they look at you like the word lien is foreign to them. Those are all assets that can be taken into considering but the big banks don't seem to want the hassle to register liens.
Deal Expert
User avatar
Jan 27, 2004
50001 posts
14047 upvotes
ONTARIO
mikeymike1 wrote: Let me share a little inside tip as well. Majority if not all lenders including us will not only calc your tdsr pre app but will do so post app too.
With this said, if your tdsr is now at 45% go ahead and add that $550-600/mth serviceability and calc what your tdsr be then? Hard denials/declines will follow.

If you were to say buy a used ATV that when termed calculated to a $200/mth approx etc serviceability then maybe there may be some consideration from some lenders.

Another hint. Most ATV lending institutions will term loans up to 10, 15 even 20 years. Not to say you have to or want to commit to overextended terms but term consideration may shoe-horn you into that ATV you want.
(Atv lending (sometimes named Powersports lending) is an actual credit product that some major banks offer. It is not always securred collateral lending like how auto is, thus why extended terming)
I didnt know.
But really ? 20 year loan for powersports loans?
Makes me want a jetski for $40 a month... term? forever...
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
UrbanPoet wrote: I didnt know.
But really ? 20 year loan for powersports loans?
Makes me want a jetski for $40 a month... term? forever...
Have you never been to the Toronto RV show or the Toronto Boat Show and the CNE?
Dozens of borrowing and lending solutions are always there including most of the big Canadian banks.

DealerPlan is well known within the boat and powersports industry
https://dealerplan.ca/
Rec vehicles, marine, trailers, snowmobiles, ATVs, motorcycles,
scroll down where they state 12-240 months.

Even on Desjardins site they list 6-240 month financing
https://www.desjardins.com/ca/personal/ ... /index.jsp

pdf example of Desjardins term limits
https://www.desjardins.com/ressources/p ... 1125985000
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Expert
User avatar
Jan 27, 2004
50001 posts
14047 upvotes
ONTARIO
mikeymike1 wrote: Have you never been to the Toronto RV show or the Toronto Boat Show and the CNE?
Dozens of borrowing and lending solutions are always there including most of the big Canadian banks.

DealerPlan is well known within the boat and powersports industry
https://dealerplan.ca/
Rec vehicles, marine, trailers, snowmobiles, ATVs, motorcycles,
scroll down where they state 12-240 months.

Even on Desjardins site they list 6-240 month financing
https://www.desjardins.com/ca/personal/ ... /index.jsp

pdf example of Desjardins term limits
https://www.desjardins.com/ressources/p ... 1125985000
Whats the usual interest rate % for these types of loans?
Deal Addict
May 10, 2011
1475 posts
524 upvotes
Ottawa
Tigress2017 wrote: banks don't account for anything other then your "Proved" income vs assets that balance you out beyond that income. Again I mention my work covers all those little itty gritty bills banks probably consider that will slash into your spending and don't want to take the risks.
They do. If your work are actually paying for all those things as part of your employment terms they would show up as taxable benefit on your T4, which you can use to prove your income. If your work are paying those "unofficially" then they are meaningless to the bank as they can change any time.
Tigress2017 wrote: I have a $22K TFSA Stock valued account.. while mentioned to the dealer.. was no where shown on paperwork since it's not income or an item to use..
You have to realize those saving are meaningless to the bank as they have no easy way to access those money should you default on your loan.
Tigress2017 wrote: I have CLEARED, 2 sleds (modern), newer boat.. collateral doesn't even exists.. when you say can you lien on them, they look at you like the word lien is foreign to them. Those are all assets that can be taken into considering but the big banks don't seem to want the hassle to register liens.
Again those mean nothing to the bank. Just having a lien does not allow the bank to take them and sell them, at least not until the bank go thru a legal battle and spend more than an ATV in legal fee.

What a bank looking for are people who have the ability to pay back the loan comfortably, not people who have asset that they can sell after they default on the loan. The former makes money for the bank, the latter just merely allow the bank to lose less money than people who have no asset at all.
[OP]
Member
Nov 15, 2017
369 posts
133 upvotes
Canada
csi123 wrote: They do. If your work are actually paying for all those things as part of your employment terms they would show up as taxable benefit on your T4, which you can use to prove your income. If your work are paying those "unofficially" then they are meaningless to the bank as they can change any time.
Its definitely not reported on the T4. :(
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
UrbanPoet wrote: Whats the usual interest rate % for these types of loans?
Main rate qualifier is of course the applicant and his/her credit background so rates can be anywhere from 3 to 5, 6, 7%
Powersports financing is not like automotive where the product itself contains a POP rate qualifier unless it's a Honda or Polaris rec atv where they have dedicated captive financiers that offer strong dealer support. (except Honda does not offer extended long terming like 7,8,10+ years)
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
[OP]
Member
Nov 15, 2017
369 posts
133 upvotes
Canada
mikeymike1 wrote: Main rate qualifier is of course the applicant and his/her credit background so rates can be anywhere from 3 to 5, 6, 7%
Powersports financing is not like automotive where the product itself contains a POP rate qualifier unless it's a Honda or Polaris rec atv where they have dedicated captive financiers that offer strong dealer support. (except Honda does not offer extended long terming like 7,8,10+ years)
The ironic thing its a polaris SXS that I'm after. The dealer got a conditional approval with a b lender at 11.9%. The condition itself is 10K down, the finance fees are 2200.

I'm not sure I want to go w/ that

Top