5m Loan And Credit Card Applications Rejected Since April

Mon, 27 Oct 2008

Nearly five million credit card and personal loan applications have been turned down by UK lenders in the past six months, a new report has revealed.

Research commissioned by financial comparison website MoneyExpert.com found that around 56 per cent (25.8 million) of UK adults have applied for a financial product since April.

Of those, 13 per cent have had credit card applications rejected, which equates to 3.27 million unsuccessful credit card applications, and six per cent have had unsecured personal loan applications turned down (1.56 million loan rejections).

The figures also warn that those whose applications are approved are being forced to pay far higher charges for borrowing money than they were 18 months ago.

According to the MoneyExpert analysis, the average APR on credit card purchases has increased from 16.77 per cent in March 2007 to the current 17.46 per cent, while the average rate on a £5,000 personal loan has rocketed from 8.6 per cent to 15.3 per cent now.

Commenting on the findings, MoneyExpert.com director Sean Gardener, said: "The banking crisis means lenders are terrified to lend to almost anyone."

"In the current climate lenders are tightening up on already tightened rules for new applications.

"Anyone whose credit record is even remotely suspect risks rejection. Banks want to recover their bad debts and they don't want to create more of the same," he added.
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