Responsible lending explained

Responsible lending is something that is very important in the credit industry. It is important for both lenders and borrowers - so what does it mean?

What is responsible lending?

Responsible lending is a lenders decision to put the customer first. This applies to many aspects of the lending process. It means finding out about customers, to be sure that they are being offered the right products. It means making sure that products are affordable and that the customers who use the service are able to manage their repayments. Importantly, it also means making sure that the terms and conditions as well as all other information that applies to the loan are clearly displayed and understandable. The credit and affordability checks that lenders carry out are also an aspect of responsible lending. They help the lender to assess whether the customer has the means to repay the loan whilst keeping on top of their other financial responsibilities. They also allow the lender to see the credit history of the applicant so they can assess how likely they are to be able to manage the loan.

Why is it important?

Responsible lending is important because it means that the customer is able to make an informed decision. By having all the information upfront, customers are able to compare products until they find a loan that is right for them. All of this is intended to make sure that the customer is able to manage their loan well and will not find themselves in unnecessary financial difficulty. All lenders are regulated by the Financial Conduct Authority (FCA). One of the main aims of the FCA is to ensure that customers are treated fairly, and all lenders are obliged to meet the requirements set out by them.

Morses Club and responsible lending

At Morses Club, we take responsible lending seriously. Our APR is clearly displayed on the homepage of our website and on all our leaflets and other materials, and information on our products is readily available. Importantly, we take a personal and individual response to all of our customers. Our agents not only make sure that customers are given a great service, but that they are only borrowing what they can afford to repay.

For more information about responsible lending take a look at the FCA website.

Representative Example:

£200 loan repayable over 20 weeks at £15.00 per week, Rate of interest 50% fixed; Representative 756.5% APR, Total Amount Payable is £300.

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