The loan application
Lending institutions offer you the option of taking out
a loan either in person, via written application, over the
phone, or on-line.
Initial assessments can be made quickly although for regulated
loans (those under £25,000) a 7 day consideration period
must be given so you are fully aware of the implications
of the home owner loan. When assessing applications the
lender will collate together your income and financial commitments
to see if you can afford to take on the loan.
They also look at any adverse credit or mortgage arrears
and where secured loans are concerned, the amount of equity
you have in your property. The suitability of the loan itself
for its intended purpose is also assessed. All lenders insist
on married couples both being named on the application form.
Lenders use credit scoring facilities and credit reference
agencies to assess your suitability. Credit scoring assesses
your personal statistics, for example your age and occupation
and each statistic is given a score. This is to ascertain
which broad category of borrower you fit into. Credit reference
agencies provide a detailed analysis of your own financial
position. In particular, any county court judgements, (C.C.J's)
which you may have, details of previous credit searches
against you and details held on the electoral roll about
you.
If you are refused a loan or wish to make enquiries concerning
your own credit file, you can apply to the credit reference
agencies for a copy of your credit file. A small fee will
be charged for this service. Details may be obtained from
your lender.
