Number of Personal Loans Available Down by 50pc

Mon, 22 Dec 2008

New figures have revealed that the number of personal loans available has nearly halved since the start of the year. The findings are based on loans of £5,000, with 105 products available for that amount in January, compared to just 57 products at present – a decline of 46 per cent. Chief Executive of MoneyExpert.com, Sean Gardner, said, ‘December is normally a time to give, not it seems if you're a loan provider however. With unemployment on the up, lenders are increasingly thinking twice before offering money they're much less sure they'll get back. The cost of this risk is being passed on to us all with higher APRs and fewer products available.’

In addition to there being fewer loan products available, the deals still being offered are accompanied by an often sizeable APR. The average interest rate on a £5,000 loan in January was 10.65 per cent, though that figure has since almost trebled to a huge 29.4 per cent. This can be attributed to a growth in the number of high interest loans, targeting higher risk borrowers. Whilst the highest APR on offer for a £5,000 loan was 13.1 per cent at the start of the year, borrowers with poor credit histories could now face loans with interest rates of between 14 per cent and 24 per cent.
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