Not Telling The Truth on Loan Applications

Over the years, almost 32 of them to be exact, in the personal finance world, you can imagine I have heard it all, from how people found themselves in debt, to why they may need a loan, and some funny tales as well.

However, there is one question that has popped up time and time again over the years, and that relates to fraud, loan fraud, and not in the sense you may initially be thinking.

Fraud is such a negative word, and brings up images of someone lying, or totally misrepresenting themselves.

And there are degrees of fraud, things many of us do, not intentionally committing fraud, but it is fraud just the same, especially with car insurance.

We may say we are the main driver of a car to save our children on their insurance, when they really are the main driver.

We may use a different address as to where we live to reduce our car insurance.

Small white lies, but fraud just the same. Especially if we have an accident and the insurer reviews and re-underwrites the policy.

The same can be had or done when applying for a loan.

Some Little White Loan Application Lies

There are a few “little white lies” that people may say or make when completing an application for a loan, however, some of these can be put down to a bad memory, or just not realising how important some information is in being approved for a loan.

But if we were to look at two (2) of the biggest omissions or “lies”, it would be in the income and expenditure department.

When you look at and consider what a lender is basing giving us a loan, there are a few factors:

* Affordability

* Credit history and credit score

* Everything else

So what is number one (1) even over credit scores, especially for bad credit loans……our survey said…..affordability!

Even for guarantor loans, the basic foundation of the loan besides having a guarantor is affordability.

As a borrower, you need to be able to show you can afford to repay the loan. And how is his done, usually through a detailed income and expenditure form.

And this is where the little white lies usually come into play.

Omitting an expense or bill, which makes your income seem to go further and that you have a larger surplus of income to repay the loan.

Increasing one’s income, to state you earn more than you actually do earn.

Naturally, is a lender asks for documentation of your income and expenses, it is difficult to “fudge” these, but with online applications, 24 hour approvals, and quick turnarounds, and competition in the lending world, these figures may no always be double checked.

So there you are, completing a loan application, and instead of putting down you earn £20,000 a year, you state you earn £25,000 a year. Where’s the harm???

Fast forward a year and you find yourself out of work, or for whatever reason you cannot repay the loan, and you are worried if you will be done for fraud.

Technically you did fraud the bank/lender, but also you think….should they have not asked for proof or documentation….this to ease your guilty conscious.

The fact is both are true.

You did give a little white lie on the application regarding your income, and the lender should have done due diligence to confirm what you stated.

So the question we have heard over the years is, “will I get charged with fraud?”.

The answer is no, probably not.

Is this a licence to put down a higher income or misrepresent yourself on a loan application….absolutely not!

But you are not going to be charged with fraud.

There are examples and cases where a person can be charged with fraud, but the everyday person such as ourselves, it is not going to happen.

The bottom line is that the majority of us are as truthful as we can be on a loan application, and fraud is a harsh and severe word, which usually means there was intent. Making a mistake is not intent.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.