Banks Rejecting Loans Based on AfterPay, Netflix & UberEats Expenses
- Banks rejecting loans after looking closely at discretionary spends, rejections due to spends on app based services
- AfterPay accounts can’t be verified by banks, and customers can hold multiple undisclosed AfterPay accounts
- Loan application times have doubled, with increased scrutiny
Georgina, 29, worked to save a 30% deposit on her first home, and when she applied for a loan through her mortgage broker she didn’t expect any problems given her large deposit.
But when her broker gave her a call to give her an update, he had bad news.
Macquarie Bank had looked through her expenses and determined that her discretionary spend was too high to service a loan.
“They were looking for a pattern of spend. They are looking at every line of your life,” Ms Emanuel, said.
Macquarie’s official reason for turning down the loan was “serviceability issues”, but highlights a growing trend of banks and other financial institutions taking a dim view on an applicant’s expenses on app-based services such as Uber & Netflix.
For airline hostess Lauren, her $300,000 application for a home loan was rejected due to her outstanding balance with micro-loans provider AfterPay.
A Westpac spokesperson issued a statement saying:
“Our customers have different lifestyles and habits so we inquire about income and expenses on a case-by-case basis as part of our responsible lending obligations,”
“Afterpay expenses represent a liability which would need to be understood as part of our broader inquires regarding income and ongoing expenses.”
AfterPay doesn’t issue statements to it’s customers, so banks have difficulties verifying balances, and customers can hold multiple accounts with the service, so there exists a risk that a customer might only disclose a small portion of their liabilities held with AfterPay.
Interviews courtesy of Australian Financial Review