- Eight out of nine 'big' lenders only offering loans to existing customers
- Customers looking for a loan through moneysupermarket.com up 20 per cent this year while new lending has fallen 28 per cent
- Average loan rates have gradually increased during 2010
Official figures from the British Bankers' Association show that, since the end of last year, monthly lending through personal loans has fallen 28 per cent*, however, over the same period, the number of people looking for a loan through moneysupermarket.com has risen 20 per cent. Whilst more people are looking for a loan, fewer are getting one.
The cost of personal loans also increased during 2009 with the current average of top 10 loans of £5,000 now 10.78 per cent, up 1.54 percentage points since January.
Customers looking for a loan now find themselves between a rock and a hard place. The most competitive lenders are the "non bank" lenders such as Tesco. However these providers have the strictest lending criteria and only those with an unblemished credit record are likely to succeed with a loan application.
*** Top 5 loans table based on £5,000
|
Provider |
APR |
|
Tesco |
8.8% |
|
Sainsbury's Bank |
8.8% |
|
Alliance & Leicester |
8.9% |
|
Abbey |
8.9% |
|
Post Office |
9.9% |
Sourced by
www.moneysupermarket.com 07.12.09
The other option for customers is to apply to a "traditional" bank for a loan. Further analysis from moneysupermarket.com has found that eight of the nine 'big' lenders are now only offering loans to existing customers, typically current account customers. Whilst acceptance rates for existing customers are higher so is the cost of the loan. To allow for this, moneysupermarket.com now allows customers to search for loans from their current account provider so they can compare this rate to others providers.
Based on £7,500
|
Provider |
APR |
|
HSBC |
8.7% |
|
Abbey |
8.9% |
|
Barclays |
10.9% |
|
Lloyds TSB |
11.3% |
|
RBS/Natwest |
12.9% |
Sourced by
www.moneysupermarket.com 09.12.2009
Tim Moss, head of loans and debt at moneysupermarket.com, said: "The financial crisis may have eased but this hasn't filtered through to the personal loan market yet. We have seen the banks go from choosy to almost locking down completely. By restricting loans to existing customers only, banks are able to manage their lending more cautiously. The Bank of England last week announced that non mortgage or credit card based lending fell by £0.7 billion in October, which given the restricted choice of loans available, is no surprise: it is quite clear that the fall in this kind of lending is almost entirely down to a lack of supply. We have also seen the average rates for personal loans increase across the board so consumers who are lucky enough to be accepted for a loan have to pay more too.
"Luckily there are players who are filling the void with the likes of A&L, Tesco, Sainsbury's and the Post Office offering competitively priced personal loans, although acceptance rates are lower so you may find it harder to get one. My advice to consumers is to shop around to see what is available to them and check their bank's offering to see what they can access as an existing customer. The most important thing to remember is that the APRs quoted by lenders are "typical" and the rate you see may not be the rate you are accepted at, so pay special attention to the deal you are offered to ensure you get the best product for you."
-Ends-
Notes to editors:
* http://www.bba.org.uk/content/1/c6/01/69/14/October_2009_Monthly_Statistics_Release.pdf
** Figures from moneysupermarket.com October 2009 website traffic data
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