What we do with declined applications
We are asked, many times each day, if we are a direct lender or a broker. The answer from our team is always the same:
“We are direct lenders and we lend our own money, there is no fees for applying, but if your application is unsuccessful we will pass your details to a company who will search, free of charge, for a loan for you.”
WHAT DOES THIS REALLY MEAN?
Well we want to help you find a suitable loan and we are a commercial company with a need to try and make some profit, so we do get paid for passing your details through to this other company. We only deal with one company and we don’t sell your details to multiple people. What happens is that your details enter our systems and pass through our internal “decision engine”. A decision engine is a software program that asks data providers about you and then uses that data and information to make an outline decision about whether we should lend or not.
Then one of two things happen, the Decision Engine will either say “yes we should look closer at this person” or “no, we can’t lend to them because they do not fit our lending criteria”.
If the details are in the “yes” group, then they will be passed to an Underwriter to consider. We take affordability seriously and this is something that we really check out before we lend. The Underwriter role is not covered in this article.
If the application falls into the “no” camp, and the applicant has given their consent, we then send some of their details (we never send debit card details) to this external company. What they have is a really clever computer system that will try and find someone who is likely to lend. We ask them to make sure that the company who is buying the lead is 100% UK compliant and adheres to all UK laws and regulations.
Sometimes, the details get passed and sold to a company that charges an application fee. We strongly urge anyone applying through us to never pay a company to apply for a loan. There really is no need to pay for a loan application.
Of course the applicant does not have to complete the application with the other loan company and there is no pressure for them to borrow from the company they have been passed to.