Lender

Definition

A lender is the party that provides the money to the customer so that they can purchase a product. This money is then paid back to the lender, normally spread into manageable monthly payments.

How do I know if a lender is reputable?

The clearest sign that a lender is reputable is by seeing if the company is regulated by the Financial Conduct Authority (FCA). You should be able to see this on the company’s webpage, normally included at the details at the bottom of each page. You can also go on the FCA’s website and check if they are registered there.

To be approved by the FCA, lenders have to follow a strict set of regulations, primarily focused on treating customers with respect and providing them with the information they need to make the correct decision based on their financial circumstances. Customers can’t be pressured into a product and must have ample time and space to change their mind.

Can I compare different lenders to get a good deal?

There are a huge variety of different lenders offering finance packages, so you will want to shop around to find a good deal. But you should be careful when applying for finance at lots of different providers, as this can be recorded on your credit file and affect your credit score. Make sure any provider you apply with conducts a soft credit search first, so you can get an accurate idea of what you qualify for without affecting your credit score.

Have a look at comparison sites to get you started. Some finance brokers, such as Creditplus, will compare several different finance providers to see what sort of packages are available to you. They should be able to explain the different qualities and requirements of each lender, and help you decide on which one is right for you. If they are FCA approved, then they will not apply any pressure and give you the time to make the right decision.

What can I do if I have a problem with the lender?

If you have a problem with your lender, you should speak to them first. They will have a dedicated complaints department that deals with compliance, so if you feel you have been mis-sold a finance package or think you have discovered something hidden in your agreement, then you must speak to them.

If, after communicating with the lender, you still haven’t come to a satisfactory resolution, then you can contact the FCA. Visit the website and follow the instructions on how to register a complaint.

Remember, the FCA is designed to help stop companies treating their customers poorly, but that doesn’t mean they will automatically rule in your favour. You will need to be able to explain your grievance in detail, with as much evidence as possible to support your claim. Make sure you don’t fall behind in your payments or have at least agreed a payment freeze with the lender, as this can affect your credit score and stop you from getting a good finance package in future.