…Biting into a chocolate bar only to discover what has been advertised to you, was in fact something much less appealing.
You’d be pretty upset and feel hard done by, right?
Yet, that’s exactly the situation loan customers face when they come to take out a personal loan in the UK today.
For most loan customers, what they see isn’t always what they’re going to get. In fact, our research found that two thirds of people applying for a loan end up with rate higher than the advertised rate, or rejected altogether.
Why? It’s because the majority of personal loan providers in the UK won’t show customers the actual rate they’ll be offered until they’ve completed the loan application. They also often leave an unnecessary hard mark on the customer’s credit file before they’ve received a personalised quote – impacting their credit score.
This practice means it’s nearly impossible for people to compare two or more loan providers because they don’t know what rate they’ll get – and so are never able to assess the true cost of the loan. Consumers are literally playing “rate roulette”, unable to make an informed decision on their finances.
In contrast, at Zopa we show you the actual rate – or real rate – you’ll be offered prior to applying for the loan, and won’t mark your credit file until after you’ve applied for the loan.
The need for transparency in the loans market is greater than ever, and as we find in our report, much work is needed to make it fairer for customers.
To find out more please check out our full report or have a watch of the video below