Wednesday, 5 February 2014

Instant checks on payday loans

The danger of desperate borrowers taking out multiple payday loans in a single day should become a thing of the past with the launch of an instant checking service for lenders.

Short term loan providers on the High Street and the internet have faced a barrage of criticism for allowing customers to borrow several times from different lenders over hours or days and build up an unsupportable level of debt.

The credit reference agency, Experian, has announced that it will start a real time data sharing service from the second half of this year.

As soon as one member updates the system with details of a loan, other providers will be able to view the details on their screens, warning them about the customer's new debt.

Previously it could take weeks for the information to be shared.

Another credit reference agency, Callcredit, has already announced a rapid checking service, to be launched in April, which will update every day.

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