What does it mean if my loan application has been referred?

A referred application basically means that your lender can’t make an automated decision based on the information provided in your application. So the data must be reviewed manually, and additional supporting information may need to be provided before the lender will decide whether to accept your application.

When you apply for a personal loan, you’ll provide information such as personal details, address history and employment history that helps your lender build a picture about your personal and financial circumstances. This information, combined with the information provided in your credit report, is used to decide whether you’ll be able to borrow money and at what rate.

In many cases you’ll receive an automatic accept or decline. However, sometimes you’ll get a notification that your application has been referred. If you haven’t come across this before, you may want to know exactly what this means and how it impacts your chances of acceptance.

Why has my application been referred?

Your application may have been referred for a number of different reasons. For example, we may need to know a bit more about your financial circumstances and spending habits, there could be a suspected inaccuracy on your application form, or we might be missing the information we need to make a decision.

It’s not always related to your credit report or credit score. In fact, something as simple as frequent address changes or your name appearing differently on the electoral register to the name you typed on your application form might require a human check.

What happens during a referred application process?

In some cases, we may not require anything further from you. Our team will simply manually review the information you’ve already provided to make a decision.

Sometimes, however, we’ll need some more information. This could include bank statements or proof of income. Usually this is needed for us to get a better understanding of your finances and how you manage your money (i.e. how much money you have coming in versus the demands on your money each month).

We offer the option for customers to grant us permission to use open banking, which is often much simpler and speedier. Open banking assists us with our affordability checks, allowing us to verify income and expenditure almost instantly, without having to manually assess documentation.

Of course, you do still have the option to send hard copies of the documentation too.

It's worth noting that having your application referred will not affect your credit file (though a hard credit check will have already been conducted when you applied).

What happens if I don’t provide further information?

You don’t have to share the additional information with us. However, if you don’t submit the documents we need or grant us open banking permission within the requested timeframe your application will expire.

If you still need a loan, you’ll be required to submit a brand-new application which will involve a further hard credit search.

Why do lenders refer applications?

It’s our goal to treat all customers fairly. That means ensuring we only lend money to customers we believe can afford the additional repayments comfortably, to avoid putting any unnecessary strain on their finances.

However, we also want to give customers every opportunity to be accepted. That’s why, if we feel we need more information we’ll ask for it – potentially allowing us to accept an application where otherwise it might have been an automatic decline.

Will a referral slow down the application process?

Not necessarily. How long the loan application process takes depends on several factors, including how quickly you share the required information.

If you grant us open banking permission, for example, you should receive a decision on your application quickly. Of course, posting hard copies of your documentation will delay the process significantly.

Read more personal loan guides

We understand taking out a personal loan is an important financial decision – and one you want to get right. That’s why we’ve put together a series of personal loan guides to help you understand how a personal loan works, how a personal loan could impact your credit score, how much you can borrow with a personal loan and much more.