Pay day loans spell difficulty for home loan applications

Pay day loans spell difficulty for home loan applications

Agents are increasingly seeing customers with a history of utilizing pay day loans being refused for mortgages, even though the loans had been applied for years ago and are also now fully paid down.

John Charcol claims the issue is growing and there’s a necessity for the lending that is payday to higher inform borrowers concerning the prospective effect taking out a quick payday loan might have on future home loan applications.

The broker states it offers seen an increase within the amount of would-be borrowers that have either been declined a mortgage or offered a reduced loan amount in the foundation they will have utilized a payday lender within the past.

John Charcol item technical supervisor Simon Collins states this stance on payday loan providers is certainly caused by originating from major banking institutions making use of automatic underwriting processes that do not take into consideration individual circumstances.

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