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40 per cent of loan applicants immediately declined and borrowers are struggling to obtain loans and headline rates are often meaningless, research shows.

Of a sample group of nearly 3,000 people all applying for loans, 40 per cent were declined within 48 hours and only 25 per cent were accepted, figures released show. Days later the remaining 35 per cent were still awaiting a decision.

Further research demonstrates that of those accepted a further 17% will not be offered the rate they applied for – making it apparent consumers are facing a double whammy of high rejection risk and restricted access to the 'typical' APR marketed by financial providers.

"Unsurprisingly the vast majority of people are applying for products with the lowest headline APRs, and the greatest proportion are destined for immediate decline.

To add a further problem 85 per cent of the top 20* providers offer their 'typical' rates on a price-for-risk basis which means the vast majority of customers apply for a loan with little knowledge of whether they will be accepted or even what rate they will be offered."

This is potentially damaging to customers as each provider receiving an application will conduct a search which leaves a 'footprint' against a person's credit record.

This imprint may have a knock-on effect if the customer chooses to apply to another financial organisation – whether because their application to the first choice lender was declined or because the headline rate was not offered. Any subsequent provider conducting a credit search will discover the previous 'footprint' and may offer a higher rate -or decline - as a consequence.

The OFT has introduced guidelines meaning providers have to offer their 'typical' rate to at least 66 per cent of accepted applicants. However, this means a third of loan applicants could still find themselves unlucky in the credit lottery and be accepted but stuck with a higher loan rate.

In an attempt to tackle this issue the loans section of Tiscali's website, which is powered by moneysupermarket, highlights providers working on a 'price-for-risk' basis by marking them clearly with a warning symbol: . A more important aid to consumers is the company's SmartSearch facility, which uses Equifax's expertise.