8 November 2006
Following the price comparison and switching website uSwitch's comments on personal loans yesterday, the banking industry has responded with a defensive message, declaring that they are doing all they can to check up on borrowers.
Yesterday, HSBC released a statement declaring that contrary to uSwitch's claims about some lenders, it insists that all personal loan customers hold a current account with the bank, into which they must undertake to mandate their salary each month, or an amount of at least £500 per month.
This enables them to obtain an immediate understanding of the incomings and outgoings of the consumer and it also shows whether the consumer has any existing credit agreements.
It also declares that its Personal Budget Planner provides customers with all the information they could need about taking out a loan to make sure they fully understand the credit agreement they are undertaking.
uSwitch also stated that it believed the Banking Code was not going far enough to help consumers, with director of financial services, Nick White, claiming: "Existing guidelines need to be tightened to make income and affordability checks compulsory."
Robert Skinner, chief executive of the Banking Code Standards Board, responded through the Times, denying that the code was failing: "I don't accept that the majority of loans granted do not take into account borrowers' ability to repay. It is different being asked about your income and being asked for proof. It is incumbent on borrowers to tell the truth."
Make a personal loan comparison with uSwitch.com and find the personal loan best suited to your needs.
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