Julian Knight: Payday loans need a wealth warning
Taking out a quickfire debt can rebound on you if you try to get a mortgage later on
Saturday 02 November 2013
John Charcol, one of the country's biggest mortgage brokers, has issued a stark warning to anyone thinking of taking out a payday loan. It says its advisers have seen some instances where lenders have turned down mortgage applications or trimmed back the amount they will lend if an applicant has taken out a payday loan in the past.
Mortgage lenders take the presence of a payday loan as "irrefutable proof" that a borrower is living beyond their means and is a "massive negative".
Now this is sensible on behalf of the mortgage lenders. Having lived through the time when loan decisions were being made in minutes, drive-by property valuations and huge numbers of self-certificate loans, it's good to see mortgage lenders applying logic at last.
However, what about the borrowers. Is anyone warning them about the consequences of taking out one of these quickfire loans? The answer is no. Perhaps, like cigarette providers, payday loans companies ought to carry a health warning that if you take one out you could be seriously damaging your chances of getting a mortgage.
In September the Office of Fair Trading concluded its report into workplace pensions. The exhaustive report concluded that schemes offered poor value but stopped short of recommending a cap on charges.
Frankly it seemed a bit of a cop out – there is a problem but we are not going to recommend anything is done about it, went the OFT's logic. Now it seems that the government agrees that the OFT's report was a bit of a waste of perfectly good trees, because it seems we are going to have a cap on charges after all and lower than the one per cent per annum that many felt the OFT would have opted for if it had somehow miraculously grown a pair.
The announcement of a pensions cap is not just a blow to insurers charging well over the odds but to the prestige of the OFT.
The appearance of the Big six energy companies in front of the energy select committee wasn't quite the showdown we all expected.
For starters many of the firms sent their spokespeople, including one exec sporting the bling-est Cartier watch I have ever seen, enough to make a Premier League footballer salivate. Nice move that, with people likely to die from cold this winter. It was a contest of blandness personified.
The MPs didn't help. With the honourable exception of Chris Pincher they did their usual routine of shouting soundbites (sorry, questions) which they thought would get them on the ten o'clock news.
All in all it was rather depressing and it seems plain to me that the Big Six are still being very slow on the uptake, that the game has changed and they have now replaced bankers as the nation's aunt sally.
They need a radical overhaul, not just of how they do business but also of their communication strategies.
They could start by leaving the Cartier at home in the safe.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Kirstie Allsopp has waded into the female fertility debate again
Gillian Anderson lays into gender disparity in Hollywood
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather on north-west Alaska beach 'for a rest'
- 5 Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
Day In a Page
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors