Questions raised over unsecured loan checks
Current processes used as part of a typical unsecured loan credit search may not be thorough enough to safeguard borrowers against the possibility of repayment defaults, suggests a new report.
According to the UK based price comparison site Uswitch, more than two thirds of unsecured loan advances were granted in 2007, with little to no evidence requested from applicants with regards to proving their stated annual/monthly levels of income.
The site feels that this lack of research into the applicants “actual” financial situation, on such a large scale, may very well result in an increased number of loan related defaults, as applicants struggle to stick to the terms of their agreement. The site also suggests that consumers who use their loan to consolidate personal debts, may also be at particular risk due to the very nature of their requirement and reliability as a borrower.
Commenting on recent loan default statistics, a spokesperson for the site stated that many lenders appear to be undeterred by the high levels of miss payments by UK borrowers, favouring bottom line performance above the financial health of their customers.
