Loan Application

[bigbanana]

My nephew is 17 years old and has a full time apprenticeship with an engineering company. He needs a motorbike to get back and fore to his place of work and hasn't got the means to buy a bike outright. His mother has made some enquiries with an online loan company with the aim of borrowing around £2k in her own name to buy the bike for him. His mother is in full time employment and earning about £30k annually in a stable job. She did not reveal on the loan application that she wanted to buy a bike for my nephew.
The loan company granted the loan but during the follow-up call, she revealed the purpose of the loan. The loan offer was cancelled on the spot but they did not disclose the reason why.
Could anyone suggest why this might have happened please? She feels that they should not have refused as she was taking out the credit and paying from her salary. The bike would have had to be in her name. Would there be an issue with insurance perhaps as my nephew wouldn't technically own the bike? I can also see that there would be issues over any no claims bonus he accrues as who do they award them to?
One of the reasons she can't understand this is that she's recently taken out a monthly contract with a mobile phone company in her name for a phone for her daughter and they know full well that the phone is bring used by her daughter.
Thank you.

[ToraToraTora]

fraud, they would have asked the purpose, she lied, later they found out.

[ToraToraTora]

why doesn;t she buy it on a credit card then do a balance transfer to one with a 0% rate and pay that off, she'll pay 3% for the balance transfer, a lot simpler and cheaper than getting a loan.

[davebro]

Why would the bike have to be in her name? If she bought it and gave it to her son he would be the registered keeper & sort out tax & insurance accordingly.

[bigbanana]

Thank you all for your replies.

She's adamant that they did not ask for the purpose of the loan during the online application. They asked only during the follow-up phone call. Curious, but there you go.

Having only achieved a good credit rating in recent months due to her job, she doesn't have a sufficiently high credit limit to buy a bike on the credit card she has currently.

Davebro, I'm of the same opinion. It doesn't make sense and was speculation on my part. I'm clutching at straws here but the loan company are adamant that they won't explain why the loan was refused.

[ParsleyDumpling]

Why doesn't she get a bank loan, surely the interest rate would be a lot lower?

[Skyline D]

At the end of the day they'll have their own risk assessment on a loan and perhaps buying a motorbike for a newly qualified teenager is on the "no" list (I imagine a lot of those end up write offs)? They don't have to tell you why, they're at liberty to give a loan or not as they see fit.

Not really sure why it needs to be a motorbike, would it not be easier (and possibly cheaper) to get a small car? Or does he not have a car driving licence? As said above, a bank loan bound to be better than an online loan company too.

There's absolutely no reason the bike would have needed to be bought or registered in her name and absolutely no relevance to the fact she already has a phone in her name her daughter uses.