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.
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