Why loan application lies are about to get riskier
More than one in 10 Australians admit they knowingly failed to declare a liability or debt when applying for a loan, according to a new survey.
And nearly one in five think it’s okay to tell a ‘white lie’ and state that they have less debt than they actually do when applying for a loan or financial service.
While it can be tempting to lie on a credit application, the implications are sometimes overlooked or downplayed by borrowers. However, all lenders are required to lend responsibly and to access a person’s ability to make repayments accurately.
“When you apply for credit, you sign a form stating that the information you provide is true and correct,” says Sarah Megginson, senior editor at Finder.
The PureProfile survey of more than 1,000 Australians in July found that just 22% of respondents said they were “very confident” in their understanding of the rules, legislation and consequences of lying in a financial service or company. loan request.
“The banks rely on this information to determine if you are able to repay the loan. Rejecting a credit application means the lender doesn’t think you can meet the repayments,” Megginson says.
“So if you make an oversight like missing a credit card or understating your expenses, the loan could go ahead and that could put you under significant financial pressure,” she says.
Alex Cherniakov, a consultant at GBG, which provides fraud detection and customer verification software and sponsored the PureProfile survey, says banks have good processes for detecting undisclosed debt and income lies, and that anyone who lies on their loan applications would fail. in obtaining credit.