You might be refused a mortgage if you EVER take out a payday loan – Money tip #187
Leah Milner, of the Sunday Times, recently wrote an excellent article titled 'How a payday loan could cost you'.
The article stated that people who take out a payday loan could be turned down for a mortgage by GE Money Home Lending. Apparently the lender will not accept applications from potential borrowers even if they have repaid an earlier payday loan.
This decision comes on the back of recent changes to the data credit reference agencies list for individuals. Previously it was impossible to distinguish a payday loan from other types of credit but Experian now show payday loans separately. So allowing lenders to see whether you have taken out a payday loan.
The problem with payday loans is that they are almost exclusively used by people struggling to make ends meet or manage their finances. Perhaps understandably lenders are becoming increasingly cautious of lending to such individuals. But while other lenders do not appear to be following GE Money Home Lending's lead at the moment it will surely only be a matter of time.
More reasons why you should avoid payday loans
But those that are tempted to use payday loans should be mindful of the risks. So read my article - The dangers of payday loans.
Image: Salvatore Vuono / FreeDigitalPhotos.net
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