The ‘quick’ loan craze in advertising sends a coded signal to the desperate

OPINION: The mania for quick loans, quick loans, loans in just 60 seconds, is not all it seems.

There are rules in the Responsible Lending Code covering the advertising of loans.

I spent a dismal few hours struggling to match lenders’ online advertising with these rules.

The code states that loan advertisements must not mislead, deceive or confuse borrowers, and lenders are prohibited from advertising “without a credit check“.

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If an ad includes a reference to an approval speed in minutes or hours, it must also contain a prominent reference to responsible lending.

This column will suggest that some lenders are sailing close to the wind.

Take the “no credit check” advertising ban.

Type “no credit check loans” into Google, and you’ll find lenders who have paid to have their links top your search results.

The lenders whose ads appeared were Loan Place, Loan Spot, Lending Crowd and Swoosh Finance.

In fact, I don’t think anyone does loans without doing a credit check, after looking at what they say on their websites.

But they advertise for people with such poor credit histories that they are desperate enough to seek out a lender who might not look at their history.

All four lenders’ websites emphasized speed.

Loan Spot’s homepage advertised “a three-hour approval time” and “an online application in five minutes (or less)”.

There was no mention of responsible lending that I could find on the page making these claims. It was elsewhere on the site.

Loan Place’s homepage said, “Get a decision in just two hours!”

Responsible credit has been mentioned, in a footnote, at the bottom of the page.

Lending Crowd claimed: “100% anonymous quote in two minutes flat!”

I couldn’t find any mention of responsible lending on the landing page I pulled this from.

Swoosh Finance had a rather low-key landing page, although the Google ad that appeared when searched read: “Very fast loans – no credit history required. Fast approvals, friendly service and stress-free repayments. Get your money in an instant. Apply online in minutes, get approved in an hour, get your money today. It’s so easy.”

All this easy credit was advertised as potentially cheap.

Swoosh’s loan rates were 6.35% to 18.95%. The lending crowd charged 6.45% to 17.23%. Loan Spot and Loan Place offered financing from 7.95%

Last week, I applied for a loan from Gem by Latitude to verify their “starting at 8.99%” claim.

I was offered 20.99% interest, which was ridiculous considering my credit rating, age, landlord status, debt-free status, and time spent with my current employer. Apparently that was a horrible mistake, even though I haven’t gotten to the bottom of it yet.

So what are these fast/quick/quick claims all about?

These are code words. Lenders and sellers like speed because it gives people little time to think.

Borrowers want fast when they are scared and embarrassed. They want it fast when an experience is so psychologically painful that they want it to end. Fast suggests less inconvenience. A pulled tooth? Do not worry. It won’t take long.

Fast is what you want when you’re in a panicky state about paying a bill, when you’re in such a state that you haven’t done anything until the last minute.

Fast is a coded language for something easy and not too intrusive, and if there’s a “no” at the end, at least it’s after five minutes, not five days.

Fast is the enemy of good borrowing.

GOLDEN RULES:

• Loans should be used with great caution
• Consumer loans enrich lenders and merchants
• They make you poorer