New EU regulations will make it harder to get an unsecured loan from February 1st so it might be a good idea to apply now if you are looking to borrow money.
The long shadow of the EU will be cast over the unsecured loans market next month when the Consumer Credit Directive comes into effect.
This is designed to offer greater transparency to the loans process and one of the good things about is that if your loan application is rejected because of a poor credit score, the loans company is duty bound to tell you which credit reference agency was used.
You could therefore talk to that credit agency and rectify any errors, if need be.
There will also be greater protection for your purchases, if paid for by credit card or a loan, so if something goes wrong with your purchase over £100, you can also hold your lender jointly liable, along with the supplier.
So all that sounds good, and in fact there are benefits to these new regulations, as I’ve pointed out.
There will be downsides, however. The main one being that lenders will be more able to increase the rates that they actually offer you, over and above their advertised rate if you have less than a perfect credit history.
Not only will this make loans harder to obtain at good rates for many people, it could also allow lenders to advertise one rate, but actually offer most of their customers a higher than advertised loan rate.