More people are defaulting on their loans according to a new survey from the Bank of England. The survey quizzed banks and building societies and also found an expectation among these institutions that this rise would continue over the coming months. Rising unemployment and the state of the economy were seen as the main two factors in the rising defaults on personal loans.
Those banks polled indicated an expectation that the availability of credit to businesses would increase in the coming months. That finding arose despite the survey revealing that the past three months had seen lending to businesses rise at a slower rate than expected.
Secured personal loans are also expected to become more popular in the coming three months, and these applicants are more likely to be successful with banks now willing to lend again according to the newest member of the Bank of England Monetary Policy Committee, David Miles. Mr Miles also made reference to the possibility of an interest rate rise in the coming months.
However, whereas banks are willing to approve secured loan applications, unsecured personal loans remain a worry to banks, who expect credit cards and personal loans to become harder to obtain in the coming months.
Loan Defaults Rise
Loan Defaults Rise
Fri, 03 Jul 2009
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