According to recent research by switching company uSwitch, £20.9 billion was lent by UK banks on personal loans, without any proof of income from the borrower. uSwitch found that 70 per cent of loan applications were not proven by earnings, with some 45 per cent of borrowers choosing loans from lenders other than their own banks.
According to the research, 15 per cent of these were not even asked to give their income when applying for the personal loan . With lending as reckless as this, it is no wonder that banks face billions of pounds worth of debt write-offs.
A finance expert from uSwitch, Mike Naylor, was reported as commenting: "With more than 7,716 loan repayments being missed every day and record write-offs, you might think lenders would have learnt their lesson, but the potential profits have clearly been too good to resist."
Naylor reportedly continued: "While the credit crunch has forced lenders to tighten up their lending criteria, these latest amendments to the Banking Code do not go far enough to help promote responsible lending in all cases."
Majority of personal loans without proof
Majority of personal loans without proof
Mon, 07 Apr 2008
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