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Payday loans jeopardise mortgage approvals

Payday loans jeopardise mortgage approvals

Category: Loans

Updated: 14/12/2012
First Published: 10/07/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Taking out a payday loan could reduce your chances of being approved for a mortgage.

Payday loans, which have exploded onto the market recently, are intended to be used as a quick fix solution in financial emergencies, such as running out of money before being paid.

However, some people with ongoing financial problems are using these loans to cope with their problems, creating a vicious circle of debt.

Because of this reason, any previous payday loan applications could be viewed by mortgage companies, who are keen to be seen in this day and age as lending responsibly, as a sign of financial distress or lack of financial security.

One such lender, GE Money Home Lending, has announced that mortgage applicants who have taken out a payday loan over the last three months will have their application declined, even if the amount has been paid back in time.

What next?

Guide to Payday Loans - this can be a very expensive way to borrow money. Make sure you've considered all the alternatives before taking out a payday loan.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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