If you’re in a bit of a bind and need to borrow money, it can be tempting to try and bend the truth ever so slightly when you’re filling out a loan application to increase your chances of being approved.
In fact, 26% of adults have lied on a loan application form
A recent survey by VoucherCodesPro found that, out of 2,147 UK adults, 26% of them had lied on their loan applications.
The most popular lie, fib, half-truth or exaggeration, which made up 31% of all the lies told, was about salary. A lot of the people surveyed increased, inflated or massaged their income to improve the chances of getting approved for a loan (or to borrow larger amounts of money).
Lying on a loan application isn’t a good idea
This isn’t a smart move, Yvonne Godwin, independent financial adviser and head of Yvonne Goodwin Wealth Management says:
“If you aren’t earning as much as you pretend you are, then it is likely that you won’t be able to afford the repayments and you will end up lurching from one financial crisis to another.”
Another 27% of those surveyed admitted to playing down their existing debt. However, this lie is the easiest to spot.
When lenders are making an assessment to see whether you’re a good fit for a loan, they can see every credit card and loan you’ve had over the past 6 years. They’ll be able to see your overdrafts too. They’ll be able to see – even at a glance – that you’ve misrepresented your outstanding debt and reject your loan application.
That’s why 86% of those that lied (or bent the truth) on their applications were caught out.
George Charles, the spokesperson for VoucherCodesPro, warned those thinking about lying on a loan application:
“Telling lies when applying for credit is nothing short of fraud and it can land people in serious trouble. Those not wishing to have a black mark put next to their name, ruining chances of borrowing in the future, should seriously reconsider telling these fibs, however small they might seem at the time.”
If you’re not sure that you’ll be accepted for the loan, don’t lie. There are other options.
As a rule, if you think that you might have to bend the truth slightly (or a lot) to qualify for the loan you’re interested in, you probably aren’t eligible for it. Not only are you not a suitable candidate from the lender’s perspective, but you may be trying to take on debt that you can’t manage, which can lead to even bigger financial problems a little further down the road.
Instead, look for a loan that you can afford and that is right for you and your circumstances. There are loans for every circumstance, from those with no credit history or poor credit history to those with a good credit score but a lower income.
(If you’re not sure what the right loan for you is, why not take our quick quiz?)