New Home Owners And Snagging Forum
Home Owners => Mortgages and Insurance => Topic started by: The Prophet on July 09, 2012, 08:55:51 am
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Many lenders are rejecting mortgage applications from people who have taken out a Payday loan, even it has been repaid in full and on time.
Payday loans provide short term credit usually over two or three weeks but charge very high annualised interest rates often as high as 300% APR
- sometimes even more.
However, some mortgage providers are mow rejecting anyone who has had a Payday loan in the last three months, or has had two or more in the last 12 months.
Many lenders see Payday loans as evidence of "financial distress" and these borrowers are therefore considered to be a greater risk.
Brian Cole of Capital One says:
"Evidence of using a Payday loan, even if you have paid it back in time, leaves the wrong sort of footprint on your credit record."