What are the final checks by a lender after they approve a loan appl?

Cheers

Tesco approved my loan, sent me the credit agreement to sign and said they will make final checks when they receive this to decide finally before paying me
Is this another credit check to see if Ive done something since applying several days ago?!

andyfromotley

Maybe, I've seen a thread where some loan providers have done two checks.

Cheers

I have done something, applied for another loan with Santnder, got rejected and this search was recorded on my cresit report. But I keep reading on here reports are meaningless so Ill send back the credit agreement anyway

[Deleted User]

The reports aren't meaningless at all. They're very important.

It's the score that's meaningless.

andyfromotley

hmmnn, well if they pick up that you applied for another loan in this time they will probably decline this one too as it looks as if you are in financial trouble!

Why are you applying for multiple loans?

Cheers

No, finances unchanged since they improved the loan!
Does anyone, who maybe works in finance, know what these final checks are?

Purpose of loan apps were home improvement and car

SeanG79

andyfromotley wrote: »

hmmnn, well if they pick up that you applied for another loan in this time they will probably decline this one too as it looks as if you are in financial trouble!

Why are you applying for multiple loans?

This is misleading, applying for another loan to compare rates is prudent, not a sign of financial trouble (4/5 applications might indicate desperation). Tesco cannot see if Santander approved or declined the loan, they can only see the credit search.

What proofs did they ask for, bank statements, salary pay slips? Those might be the checks. Many lenders do a second credit search, just prior to pay out to confirm no adverse information has been recorded.

andyfromotley

SeanG79 wrote: »

This is misleading, applying for another loan to compare rates is prudent, not a sign of financial trouble (4/5 applications might indicate desperation). Tesco cannot see if Santander approved or declined the loan, they can only see the credit search.

What proofs did they ask for, bank statements, salary pay slips? Those might be the checks. Many lenders do a second credit search, just prior to pay out to confirm no adverse information has been recorded.

I don't think its misleading, even one check with another loan company in-between applying and final approval of the first loan may very well impact the decision of the original lender.

SeanG79

andyfromotley wrote: »

I don't think its misleading, even one check with another loan company in-between applying and final approval of the first loan may very well impact the decision of the original lender.

Ok, so by your logic, if someone is approved at an APR of 29% and the lender sends out documents (this is normally an automated process), then you shouldn't apply anywhere else for a chance of a better rate, you must either accept the first offer or not take a loan at all?

With the increased presence of loan comparison sites, unless you are approved at the advertised representative APR, you should definitely consider another provider. Personally I would look at loan companies that only perform "soft searches", but if you have had 1 credit search with Tesco, been accepted and then had 1 search with Santander (declined), it is highly improbable that it will result in Tesco's withdrawing their approval. If you had been approved by Santander and that loan now showed as active on your credit profile, then you could very well have the approval withdrawn.

andyfromotley

The trouble is that tescos won't know the status of that second application, only that a check was made.

Whilst what you suggest all sounds fine, however it is imo undeniably true that people in financial trouble do exactly this, apply for one loan, then apply for another one (or more) in the window between application and approve. Thats partly why some lenders carry out two checks to make sure there hasn't been a material change. They aren't sophisticated enough to know whats going on, are reluctant to trust the customer and may just auto decline.

My 'logic' is not to tell people what to do, i'm just pointing out how i think this could look to a lender and the possible consequences. You don't have to look too far on these boards to find examples of where exactly this happens.