Dramatic Increase In Secured Loan Rejections
The majority of people in the UK are fully aware that it is now becoming extremely difficult to get finance through a personal loan or mortgage.
Banks and building societies have become reluctant to lend to anyone with anything other than a perfect credit record and even then they are applying stricter lending criteria and tighter restrictions than ever before. As a result of this, more and more potential borrowers are being rejected for the loan they require, whether this is a small unsecured loan, or a secured loan or mortgage.
The full extent of this increased level of rejections has just been emphasised by a new survey which has been conducted by Moneysupermarket.com. The results from their research shows that the total number of secured loan applications which have been declined has increased by a staggering 400 per cent over the course of the past two years.
Around this time in 2007, there were approximately 2.3 per cent of secured loan applications rejected by the lender, however this figure has now risen to 8.8 per cent to the present day. According to the research, the majority of these loan cases did actually fit the lenders criteria at the time of application, but the lenders later found adequate reasons to reject them, highlighting the reluctance to offer new loans in the current economic climate.
Louise Cumming at Moneysupermarket.com had this advice for individuals looking for a new loan “Credit histories play an important part in the process and any blemishes will make finding a mortgage increasingly difficult. All debt repayments, credit cards, loans, store cards etc, must be made on time. Details of all missed repayments are held on your personal file for six years and may count against you when your credit rating is accessed.” She also advised borrowers to be realistic about how much they applied to borrow on a new loan and to have at least a ten per cent deposit available.
