Finance Application Successes And Failures Revealed
Wednesday, 18. June 2014
Following on from my last piece it seems that 1 in 6 applications for finance were rejected last year according to statistics revealed by OceanFinance.co.uk. It will be interesting to see how this compares to 2014 following the introduction of the new Financial Conduct Authority (FCA) rules in April of this year.
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They found that more than a third of the adult population (38.6%) applied for finance of some form or another over the last 12 months. This was an increase from 2013 when 33% applied for one or more of the popular credit products. Men are more likely to apply than women by quite a margin, 43.6% vs 34.4% over the last 12 months.
The age group most likely to apply for credit are 25 – 34 at 60.6% whilst only 17% of the over 55’s applied for credit according to the stats. The most likely decline would be if you apply for an overdraft at nearly one in five declines (18.6%). 16% of those applying for a personal loan get declined.
The good news for applicants last year, not so sure the same will apply this year, is that car finance applications were most successful with just 11% being rejected. Applications for a first mortgage was the type of finance that lenders liked the most as they were most likely to be accepted, no doubt helped along by the Government incentives reducing the risk. 84.5% of all applications were accepted over the last 12 months.
The type of lender most likely to lend to applicants are what are known as ‘crowd lenders’ or ‘peer to peer lenders’ with an acceptance rate of 86%. It was also found that rather than operate a straight accept or decline process applicants were offered a higher rate of interest if they were felt to be higher risk, particularly when applying for credit cards.
I fear that this will all change dramatically over the coming year – for the worse! By Graham Hill
