How Do We Make A Loan Decision?

We often get asked about how we decide is someone gets a loan or not. Not everyone is successful when they apply for a loan, and there is a good reason for declining a loan, particularly if granting the loan would damage the financial well-being of the applicant.

As a community, member-focused business, Hoot makes sure that every loan application is assessed on its merit and according to individual circumstances. The decision is made by a person, not a computer so you know that your circumstances are always taken into account.

There are three stages to making the loan decision, all based on the information you provide.


Affordability is about being able to meet your household expenses and credit commitments, be able to pay the Hoot repayments and still have something left over for savings or emergencies.

We will look at your bank statements or Open Banking link to check your income and outgoings to make sure you can meet the repayments.

As a responsible lender we cannot offer a loan to someone if we think they cannot afford it.

Credit History

We check your credit report to see how you are managing any debt you already have.

We will see what other credit you have like credit cards, loans, home credit or finance and make sure you are repaying those. This tells us that you are managing your credit.

Missed payments, defaults, debt collectors or CCJs will tell us that you are not managing your credit well. It may not stop you getting a loan with us but it will affect the decision.

We will not lend to you if doing so makes your situation worse, or if your credit report tells us that you are not doing anything to repay other debt.

Your individual circumstances

Once we have checked affordability and credit report we will look at the other information we have to help us make the final decision.

If you are already a member, we will look at whether you have had a loan with us before, and if you have repaid it with no missed payments.

We will also look to see if you are saving with us too. Saving is an important part of being a Hoot member. If you are successful in getting a loan, you will be expected to save a little whilst you are making your repayments.

We will also look at any documents to verify your identity and to confirm any income you say you have. We may ask you more questions before making the decision just to be sure we are lending responsibly.

Making the decision that is right for you

We can’t always give the the answer you want and it is important to us that we don’t make your financial situation worse by adding to your spending or to your debt. Borrowing is not always the best solution. When we decline a loan we will always give the reason why and tell people about where they can go to get help with their finances.

Most of our members who have been successful in getting a loan are saving for the first time and building up a buffer for the future.

The financial well-being, of our members and the community is at the core of our values and we think that lending responsibly plus encouraging savings are the key things in achieving that goal.

17 Jun 2021

Author: David Batten, CEO
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