Payday loan & mortgage application

bje89

I originally started with a £200 loan and have been financially under pressure because I have been trying to pay this back since taking out the original loan last November hence why I had to enter into a repayment arrangement as the loan was rolled over until this was no longer an option, this was the only option with that payday lender instead of seeking debt management help.

bje89

I understand exactly what the credit report does just wasn't sure why there are so many showing up for the same account with that company.

Daniyella

I was told that you will never get a mortgage with a pay day loan showing on your credit report as it looks like you have money problems, why anyone would ever take out a pay day loan with their ridiculous interest rates is beyond me!

Candyapple

Some night-time reading for you.....

https://forums.moneysavingexpert.com/discussion/4719895

http://www.dailymail.co.uk/money/mortgageshome/article-2173443/Payday-loans-Worrying-news-million-needed-fast-cash.html

http://www.mortgagestrategy.co.uk/covers/black-mark-for-payday-loans/1062225.article

xgingerx

Interesting Candyapple. I guess it all boils down to the lender how they view it and also reading between the lines it appears that only recent or outstanding pd loans would be viewed poorly. Talking from Experiance this is basically the same as defaults as time goes by they become less significant, ie I got a 5,000 credit card with MBNA with about 3 defaults but the last 3 years my file was pretty spotless.

Sinhanada

Daniyella wrote: »

I was told that you will never get a mortgage with a pay day loan showing on your credit report as it looks like you have money problems, why anyone would ever take out a pay day loan with their ridiculous interest rates is beyond me!

Because Daniyella not everyone is fortunate not to run into difficulties or have access to good credit at reasonable rates. I've fallen foul of them and at the time the APR didn't worry me (It was after all a yearly rate and I was borrowing for a month).

I wouldn't touch them now and am rebuilding my credit but I would never judge or ask harshly of anyone why they would do something. After all, being human is about being different and unique!

tinkerbell28

Sinhanada wrote: »

Because Daniyella not everyone is fortunate not to run into difficulties or have access to good credit at reasonable rates. I've fallen foul of them and at the time the APR didn't worry me (It was after all a yearly rate and I was borrowing for a month).

I wouldn't touch them now and am rebuilding my credit but I would never judge or ask harshly of anyone why they would do something. After all, being human is about being different and unique!

She has run into financial difficulties, she is on a DMP for an old debt, which makes her post even more "glasshouses".

Daniyella

Indeed i have 8years ago thanks for pointing that out Tinkerbell, i was just saying that i was advised that if you ever taken out pay day loans that you wont be able to get a mortgage as your classed as high risk whether you have paid them off or not, i just wish people could see that those pay day loans arnt the answer.

kingstreet

As I said on the OP's other thread elsewhere, only NatWest routinely declines on sight of a visible payday loan history. Other lenders will look at the rest of the case and decide based on the full picture.

If you have a PDL history and other credit issues, be prepared for a bumpy ride and ensure you get the mortgage fully agreed in principle before you spend money on fees and commit to purchasing a property.