Online applications mean more Brits are being rejected for unsecured loans
Online loans mean more people rejected
Wednesday, 11 Apr 2007 09:05
More than a million Britons have been rejected when applying for an unsecured loan in the last six months, and this figure is being driven up by online loan providers.
Figures from MoneyExpert.com show that since September some 1.39 million people have been refused access to credit, potentially hurting their credit score and making it harder to get access to money in the future.
And these rejections are being driven by the rise of the online personal loan, MoneyExpert argues, with one unsecured loan provider in three now offering the chance to take out loans over the internet.
"These days we're all short of time and providers are keen to point out that they can offer you credit quickly," said MoneyExpert chief executive Sean Gardner.
"While saving time on your application may seem important, you have to weigh up what matters most – convenience or getting accepted."
The independent financial comparison service thinks the rise in online applications means more people are relying on online forms and not checking their credit rating or speaking to an advisor, and this could be behind many of the rejections.
"Loan providers are getting tough so applicants shouldn't assume that, just because the loan is available online, acceptance is automatic," Mr Gardner said.
"The same rigorous rules apply however you request credit and if you're rejected too often it'll be your credit rating that suffers."
He also had advice for people who are being rejected.
"There are alternatives to unsecured loans. For example homeowner loans are often just as competitive as unsecured rates," Mr Gardner explained.
"If you're regularly getting refused credit take your time to research your options before reapplying – there are many free tools online which can help you. Alternatively, you can contact your local Citizens Advice Bureau if your situation is acute."