5m loan and credit card applications rejected
Credit card applications rejected
Wednesday, 15, Oct 2008 03:10
A total of 3.37 million credit card and 1.55 million loan applications were rejected over the last six months.
MoneyExpert.com estimated 56 per cent of Brits applied for financial products in the period – with 13 per cent of credit card applications and six per cent of loan applications rejected.
However, those whose applications are approved are facing far higher charges for borrowing.
The average APR on credit card purchases has risen from 16.77 per cent in March 2007 to 17.46 per cent now.
The average rate on a £5,000 personal loan has increased from 8.6 per cent to 15.3 per cent.
"The banking crisis means lenders are terrified to lend to almost anyone," said Sean Gardener at MoneyExpert.
"They are battening down the hatches and focusing on getting as much money back as possible. In the current climate lenders are tightening up on already tightened rules for new applications."
He added anyone whose credit record is even remotely suspect, risks rejection.
"Banks want to recover their bad debts and they don’t want to create more of the same."
Mr Gardener went on to advise those without a perfect credit record not to apply for the top products.
"Lenders just won’t accept your application, particularly in the current climate," he said.
"Make sure you apply for a product that is suitable for you and that you only try to borrow what you can afford to repay."