Loan providers getting choosy as consumers suffer

Edited by the Insidemoneytalk editorial team Nov 12, 2007

Loan acceptances declining in each of the past six months

People are facing increasing knockbacks on loans as banks get tougher with their lending criteria.Many banks deny they are changing their criteria but internal research by price comparison site moneysupermarket.com shows they are.Despite the quality of loan applications remaining constant since April, acceptance rates have decreased in each of the past six months.Tim Moss, head of loans at moneysupermarket.com, said: "Clearly some people who should be offered loans aren't getting them at the moment." The banks are denying they are getting choosy, but our findings show they are and many deserving Brits are suffering because of it." In the current climate of rising interest rates and the global credit crunch, it might not be long before we are getting credit checked to have the newspaper delivered." Loan acceptance rates since January 2007 on moneysupermarket.com "Loan acceptance rates are decreasing, showing that now, more than ever, providers are looking for lower risk customers to help reduce the chances of having bad debts on their books." The trouble now is that people with near spotless credit records are finding it difficult to get a loan, or only being offered one a higher rate.

With Brits facing increasing mortgage payments, petrol prices and winter energy bills, they have less disposable income, meaning in the short-term, things will only get tougher for them." moneysupermarket.com's SmartSearch facility, which utilises Equifax's expertise, helps people search and apply for the best loans for their credit profile.

Where people are worked out to be a slightly higher risk, they will be guided towards the best-value products to suit them and their credit rating - greatly increasing their chances of being approved.

SmartSearch with Equifax is at www.moneysupermarket.com/loans.Tim Moss added: "SmartSearch takes a little longer than our Quick search but it is worth spending those extra few minutes to increase your chances of getting a loan, and at the rate you applied for.