Many rejected for credit remain unaware of alternatives
Which4u, 28 Aug 2013
People rejected for products by their banks could be paying over the odds for alternative sources of credit as many remain unaware of the options beyond payday loans.
Almost a quarter of Brits who have applied for credit cards, personal loans, and mortgages have been turned away by their banks, according to a survey from Amigo Loans.
Almost half believe that a poor credit rating influenced the bank’s decision, while around a quarter are worried about their current credit score.
The survey also highlighted the lack of knowledge about alternative sources of credit. Almost three quarters (72%) of rejected applicants said that they knew they could turn to payday lenders.
Despite nineteen lenders leaving the market in recent weeks, they are still populating the high street while banks continue to close branches in metropolitan boroughs (read more).
But 19% remain unaware of options such as social lending or peer-to-peer loans. Not-for-profit credit unions, which offer loans at more affordable rates, are also expanding their operations following investment from the Government.
James Benamor, the chief executive officer of Amigo Loans, said:
The majority of Brits are only aware of payday lenders who offer loans at ridiculous rates, and these are likely to lead consumers into even more financial difficulty.
If you need access to credit and are turned down by your bank, it’s vital to remember that there are other options out there and struggling Brits shouldn’t find themselves being forced down the payday route.
Read the full article here