Personal loan market shrinks again
Two more personal loan providers have withdrawn from the market, as the credit crunch continues to spread through the financial services industry.
Hanley Economic Building Society and Eskimo Loans (funded by Northern Rock) have withdrawn their personal loan offerings, according to financial comparison site Moneyfacts. This follows GE Money, Leeds Building Society and LV=, who all left the market earlier this month. Moneyfacts estimates this marks almost a 10% reduction in the number of personal loan providers.
Esther James, personal finance analyst at Moneyfacts, said: “Such a large reduction in just the last month is worrying. With no signs of rate rises slowing, it’s a rather unsettled market. The credit crunch is showing its strength in the personal loan market.
“Anyone considering a personal loan might be advised to act sooner rather than later. With less choice, a more cautious lending strategy and the impending decision on payment protection insurance sure to shake up the market, the 2008 loan market could look very different.
“While a handful of competitive deals are still available, rates as high as 10% now feature in the Moneyfacts.co.uk best buy charts. Investing some time in shopping for the best deal could save you a bundle in the longer term.”