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Assessing your application

  1. What happens next?

    Once your loan application and supporting documents have been submitted, a member of our experienced underwriting team will be tasked with reviewing your application and providing you with a final decision. To do this, they make use of the following techniques:

    • Credit checks: We perform a detailed review of your credit files
    • Affordability checks: We check income, outgoings, bank accounts and debt
    • Identity checks: We use sophisticated software to verify your identity
    • Fraud checks: We're a member of Cifas and work closely with them to help prevent fraud

    Please note that the rates you received in your personalised loan quote may be subject to change, for example if we find something in your application which was factually inaccurate or based on other information in your credit file. We may also contact you by phone while assessing your application should we need to clarify any ambiguities or require further information. However, we aim to deliver a decision to you on your application within 1-2 working days, and this will be done via email.

    If your loan request is approved, we'll let you know and you can then decide whether you wish to proceed.

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  2. Underwriting process/criteria

    Our underwriting team review each case to assess the likelihood of borrowers making their required payments based on many factors including the affordability of the loan repayments and their credit history. In assessing affordability, we'll look at your income and outgoings to make sure you can afford to meet repayments throughout the term of the loan. We'll also make sure you've got a strong record of managing credit in the past.

    An underwriter will review everything that you tell us, and this begins with the declarations on the application form. The key characteristics we consider are age, employment status, income, how long you have lived in your current property, residential status, loan amount, loan purpose and how many earners there are in your household. The following 3 elements are important for us in terms of covering such criteria:


    Your credit search

    • Our underwriters use electronic identification procedures by connecting directly with Equifax, our credit reference agency, to verify your identity.
    • We compare key credit data such as mortgages, loans, credit cards and bank overdraft records against those disclosed by you in your application. We also review how many other financial services companies have searched you, verify electoral roll registrations and look at your financial associations (other people that you share a financial relationship with).
    • The credit search shows your payment history as reported by other lenders, and validates whether you have had any adverse credit in the past. Even late payments are reported on a credit search and can adversely affect your application.


    Your bank statements

    We often ask for copies of your recent bank statements during the underwriting process. Doing this helps us to understand how well you manage your money. Bank statements also allow us to confirm the following information:

    • Your full name and address
    • Salary credits and whether they are on a regular basis and are a regular amount
    • General transactional history and whether regular payments are made to credit agreements
    • Any recent unpaid or reversed transactions
    • Credit payments not disclosed on your application form
    • Evidence of short-term, high-cost credit usage (for example payday lending) or excessive online gambling
    • Outgoing day-to-day costs, spending habits and ongoing obligations
    • Use of authorised credit limits


    The maths

    Once we have verified your income, outgoings and credit history, we use an objective mathematical formula to calculate your affordability score and creditworthiness score. As a responsible lender we are committed to ensuring that each loan is affordable and sustainable for the full term.

    The results of these calculations allow us to assess the following:

    • What is the value of total debt outstanding? Is this sustainable and reasonable in comparison to your annual net income?
    • Is the loan affordable based on your compulsory financial obligations, including your Lending Works loan, compared against your income?
    • Is there sufficient disposable income after all commitments and living expenses are taken into account?

    You can find out more about how we conduct credit scoring by clicking here.

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  3. Calculating the APR

    At Lending Works we use a risk model to determine the price of a loan for each individual applicant. We consider all of the data and information described above to assess how likely it is that you will meet all of your loan repayments. In simple terms, the level of risk you pose as a borrower who might default is proportional to the final APR you will be offered.

    However, for a more in-depth description as to how we calculate the APR, please click here.

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  4. Verification and fraud

    Lending Works takes financial fraud very seriously. We are a member of Cifas – the UK’s largest and most comprehensive fraud sharing database. Throughout the entire underwriting process we review everything to ensure all details are true, accurate and reflect the applicant’s personal circumstances. If we find anything that is unacceptable or deliberately misleading we will report it appropriately.

    To read more on the loan underwriting process, please click here.

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