‘Fast’ loan mania in advertising sends coded signal to the desperate

OPINION: The mania for fast loans, quick loans, loans in just 60 seconds, is not all it appears to be.

There are rules in the responsible lending code covering the advertising of loans.

I spent a dismal couple of hours struggling to match lenders’ online advertising with those rules.

The code says loan adverts should not mislead, deceive or confuse borrowers, and lenders are banned from adverting “no credit checks”.

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If an advert includes a reference to a speed of approval in minutes or hours, it must also contain a prominent reference to responsible lending.

This column will suggest some lenders are sailing close to the wind.

Take the “no credit checks” advertising ban.

Type “no credit check loans” into Google, and you find lenders who have paid for their links to come up top of your search results.

The lenders whose ads popped up were Loan Place, Loan Spot, Lending Crowd, and Swoosh Finance.

I actually think none are making loans without doing credit checks, having looked at the things they say on their websites.

But they are advertising for people with such poor credit histories they are desperate enough to search for a lender that just might not look at their histories.

All of the four lenders’ websites made a big thing about speed.

Loan Spot’s homepage advertised “approval time three hours” and “apply online in five minutes (or less)”.

There was no mention of responsible lending that I could find on the page making those claims. It was elsewhere on the website.

Loan Place’s homepage said: “Get a decision in just two hours!”

Responsible lending was mentioned, in a footnote, at the bottom of the page.

Lending Crowd claimed: “100% anonymous quote in two minutes flat!”

I could find no mention of responsible lending on the landing page I took that from.

Swoosh Finance had a rather muted landing page, though the Google Ad that came up on the search read: “Seriously fast loans- no credit history required. Fast approval, friendly service and stress-free repayments. Get your cash in an instant. Apply online in minutes, get approved in an hour, get your cash today. It’s that easy.”

All this easy credit was advertised as being potentially cheap.

Swoosh’s loan rates were 6.35% to 18.95%. Lending Crowd charged 6.45% to 17.23%. Loan Spot and Loan Place offered finance from 7.95%

Last week I applied for a loan with Gem by Latitude to fact-check its “from 8.99%” claim.

I was offered 20.99% interest, which was ludicrous given my credit score, age, home-ownership, debt-free status and time with my current employer. Apparently, it was all a horrible mistake, though I am yet to get to the bottom of the affair.

So, what are these fast/quick/rapid claims all about?

They are code words. Lenders and salespeople like fast because it gives people little time to think.

Borrowers want fast when they are frightened and embarrassed. They want fast when an experience is so psychologically painful they want it to be over. Fast suggests less unpleasantness. Having a tooth pulled? Don’t worry. It won’t take long.

Fast is what you want when you are in a state of panic over paying a bill, when you are in such a state you have put off doing anything until the last minute.

Fast is coded language for something that is easy, and not too intrusive, and if there is a “no” at the end, at least it’s at the end of five minutes, not five days.

Fast is the enemy of good borrowing.

GOLDEN RULES:

• Loans must be used with great care
• Consumer loans make lenders and retailers richer
• They make you poorer