(PRWEB UK) 28 July 2014
The lender has revealed that following new guidelines by the Financial Conduct Authority, they will now begin charging application fees - not admin fees - for loan applications on all types of credit, including those not applying for Payday Loans.
QuickLoans.co.uk recently handed back its payday loan license and no longer offers them. Despite that, in what the lender said was an unforeseen (even to them) outcome of the FCA's changes, they are finding that the projected number of loan applications had tripled since the start of the July. However these are applications that the lender doesn't want according to QuickLoans.
Declined applications are a normal part of lending. However, the lender explains that this issue is significantly different this time in that that these new applicants have already had applications declined with several other lenders, usually within the previous 48 hours. Some have had applications declined with up to 8 other lenders before giving up and accepting that they won't be offered a loan.
The average cost of a full credit and fraud check is around £4, an individual who applies 8 times can cost the industry approximately £32. Potential borrowers going on a type of "application rampage" is becoming common.
The effects of this are that QuickLoans and other lenders are seeing the number of credit checks they have to pay for sky rocketing, whilst the number of approved applicants drops.
Martin Bishop, Operations Manager, QuickLoans.co.uk says that "This a double hit from the FCA, they have both reduced our income, and increased our outgoings in the same instance. As with any business, increased costs have to be passed on to the customer. That is what we now have to do, we have no choice".
The website has gone from approving 1 in 6 applications in June, to approving just 1 in 14 in July for unsecured lending. The lender expects that other independent lenders will start to charge in the New Year as price caps come into force.
QuickLoans.co.uk will start charging for applications from the 1st of September. The cost of each application will be £6.99. This fee is non refundable to those who are declined, though it will be refunded to those successful in being offered credit.
The lender said that those who can't afford then £6.99 application fee - shouldn't be applying for a loan anyway. QuickLoans also urges people not to apply at multiple sites after being declined by a lender.