New figures show that only a quarter of potential borrowers were approved straight away, with a further 17 per cent being offered a higher rate than they hoped for.
Stuart Glendinning, managing director of moneysupermarket.com which carried out the research, said: “Most customers will be shocked to discover how high the immediate decline rate is.
“As if this isn’t bad enough consumers then face a lottery of whether or not they will be offered the headline APR.”
Although APR “typical loan rates” must be offered to two thirds of borrowers under current rules, many firms, particularly big banks, are avoiding putting rates in adverts.
This means that people will have to apply to find out what rate they could be offered, incurring the risk of rejection and, as Mr Glendinning said, wasting their time.
He recommended that people exercise caution when applying or look at loan comparison websites, as being rejected for a loan can affect a credit rating.