Recently released figures have shown that increased restrictions on lending and lower demand for borrowing have led to a sharp fall in the value of personal loans issued in the first quarter of this year in the UK.
Over the past couple of years lenders in the UK have become far more restrictive when it comes to giving out finance to borrowers, with the effects of the global credit crisis and the recession leading to many lenders tightening up their lending criteria. At the same time consumer appetite for personal loans also seems to have dwindled, with many loathe to get themselves into further debt due to financial worries and possible job losses.
These and other factors are thought to have affected the number of personal loans that have been issued in the first quarter of this year, with recent figures indicating that personal loans have declined by over a third in the UK in the first three months of this year.
The figures were released by the Finance and Leasing Association, with the data showing that during the first three months of this year around £598 million worth of personal loans were granted. Compared to the first three months of last year this reflected a drop in thirty nine percent.
Fiona Hoyle from the FLA said: “Lenders are already making significant changes to the way they sell credit, to comply with the EU Consumer Credit Directive and the Office of Fair Trading’s new rules on responsible lending. The government’s proposal for further regulation before these changes have been implemented risks confusing customers and gold-plating the EU Directive.”
Source - Compare And Save